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Federal Reserve sees pick-up in US growth | Federal Reserve sees pick-up in US growth |
(35 minutes later) | |
The Federal Reserve has maintained its huge bond-buying programme and has predicted a pick-up in growth in the US economy. | The Federal Reserve has maintained its huge bond-buying programme and has predicted a pick-up in growth in the US economy. |
It said that it would hold its key rate at near zero and keep buying $85bn (£56bn) in bonds every month to help lower long-term interest rates. | It said that it would hold its key rate at near zero and keep buying $85bn (£56bn) in bonds every month to help lower long-term interest rates. |
Markets have been debating when the central bank will end this programme. | |
Earlier, official figures showed that US economic growth for the second quarter had been more than expected. | |
The Commerce Department said the US economy grew at an annualised rate of 1.7% in the April to June period, a faster pace than expected and up from a revised 1.1% in the first quarter. | |
The Federal Reserve said the economy "expanded at a modest pace during the first half of the year". | |
"The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline," it added. | |
Federal Reserve chairman Ben Bernanke had suggested in May that the central bank might end its bond-buying programme, which led markets to fluctuate wildly. | |
By buying up bonds, it has tried to lower long-term interest rates in the hope of spurring economic activity. Lower long-term interest rates should encourage consumers and businesses to take out loans for anything from homes to new equipment. | |
The Federal Reserve lowered the jobless rate at which it would consider raising interest rates to 6%, down from a prior figure of 6.5%. The jobless rate is currently 7.6%. | |
Jobs growth has averaged 202,000 a month since January, up from 180,000 a month in the last six months of 2012. |
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