NO TAPER YET...as the Fed sees slower 2013 growth, higher rates in 2015
WASHINGTON (Sept 18) The Federal Reserve on Wednesday cut its U.S. growth forecast for the third time this year, saying the economy is likely to expand between 2% to 2.3% in 2013 instead of its original estimate of 2.3% to 2.8%. By 2016, the central bank predicts U.S. growth will accelerate to a range of 2.5% to 3.3%, with short-term interest rates rising from zero to an average of about 2.25%. The central bank also trimmed its growth projection for 2014 and kept its estimate for 2015 largely intact, according to its "central-tendency" forecast. Inflation as measured by the PCE index is not expected to exceed 2% for at least four years. The Fed predicts an inflation rate of no higher than 1.2% in 2013, rising to a range of 1.7% to 2% by 2016. The unemployment rate, meanwhile, is forecast to fall to as low as 7.1% at the end of 2013, 6.4% in 2014, 5.9% in 2015 and 5.4% in 2016. In light of these predictions, the vast majority of Fed policymakers predict the bank will not raise the short-term fed funds interest rates until 2015. By 2016, the fed funds rate could move to a range of 1.75% to 2.25%.
Consequently, the US Fed announces NO TAPERING. On this news gold surges upward by $47 to $1346, while silver leaps 4.07% to $22.36. AND DOW INDEX MAKES A NEW ALL-TIME HIGH AT 15,657.