On Wednesday, following a two-day meet of Fed policymakers, the US Federal Reserve said that the US economy, which had entered into a recession back in February 2020, was heading towards its strongest growth in roughly 40 years, triggering hopes of a rapid recovery as expected by Wall Street analysts following release of a massive stimulus package earlier this month.
Aside from that, March 17-18 FOMC minutes had also unveiled that the US Central Bank policymakers had been expecting an upsurge in inflation in a near term, nonetheless, Federal Reserve had reiterated its dovish stance on a rate hike and pledged to remain accommodative until a full recovery arrives.
Fed’s Powell expect at least 6.5% growth in fiscal 2021
On top of that, speaking at post-FOMC minutes press conference, a confident US Fed Chair Jerome Powell was quoted saying that a majority of Fed policymakers were expecting at least 6.5 per cent in GDP (Gross Domestic Product) growth this year due to massive Government stimulus adding “The (stimulus) checks are going out ...
COVID cases are coming down. Vaccination is moving quickly. We are committed to giving the economy the support it needs to return as quickly as possible to a state of maximum employment. We are not actually done yet. We are clearly on a good path.
But we are not done, and I would hate to see us take our eye off the ball ... There are in the range of 10 million people who need to get back to work”. Fed officials, in tandem, had estimated US economic growth to remain above trend for at least next two years, forecasting the economy would climb 3.3 per cent and 2.2 per cent in 2022 and 2023 respectively compared to a previous estimate of an average of 1.8 per cent growth in long-term.
Meanwhile, branding Fed Chair Powell’s post-FOMC remarks ‘very dovish’ given the scale of momentum and strong data flow which the US economy has been witnessing over recent months, a chief executive of trading platform Webull said following the Fed announcement, “There was just a lot of anxiety which definitely pumped up bond yields so far, but the Fed’s very dovish kind of response for a quite strong economic outlook is a big sigh of relief. ”