The Federal Reserve on Wednesday slashed its 2008 US economic growth forecast by a half point to a range of 1.3 to 2.0 percent, citing the housing slump, tight credit and higher oil prices.
But the central bank, while stressing the uncertainty of the outlook, predicted the economy would pick up steam in 2009.
The Fed's sharp downward revision in 2008 output growth expectations followed a three-quarter-point reduction in November, to 1.8-2.5 percent from 2.5-2.75 percent.
The Fed said the "considerably lower" forecast was due to a number of factors, "including a further intensification of the housing market correction, tighter credit conditions amid increased concerns about credit quality and ongoing turmoil in financial markets, and higher oil prices."
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