Anchor Markets Blog

FED Forecasts Better Economic Data

Written by Josep Duran | Sep 23, 2020 6:19:36 PM

Last week, the FED met to make a decision on interest rates. As expected, interest rates remained between 0% and 0.25%.

The interesting thing about the meeting was not this decision, but the FED's speech and its economic forecasts.

Despite showing concern about the Covid-19 crisis, its economic forecasts improved substantially compared to the last meeting in June.

As we can see in the graph, the US economy will "only" fall by 3.7% in 2020. Compared with other economies, such as Spain, where the drop in GDP is expected to be close to 10%, we can say that this figure indicates a greater resilience of the North American economy compared to other developed economies.

Similarly, the expected unemployment rate was also better than in June.

 

At the same time, inflation will also be higher than expected, thus indicating a reactivation of economic activity.

 

Although the macroeconomic data for the United States is not good, it is better than expected last quarter.

It seems that, at least in the US, the recovery takes a more "V" shape than in other economies, in line with expectations priced in the financial markets.