Federal Reserve officials significantly upgraded their view of the economy this week even as they projected interests rates would stay near zero for years to come.
“Economic activity and employment have picked up in recent months but remain well below their levels at the beginning of the year,” the Fed’s monetary policy setting Federal Open Market Committee said in the announcement issued at the conclusion of its two day meeting.
That is somewhat of an understatement given the size and scope of the changes in the Fed’s economic projections for the near future.
The median Fed official projection for Gross Domestic Product in 2020 went from a 6.5 percent contraction at the June FOMC meeting to a 3.7 percent contraction. The unemployment rate is seen as falling to 7.6 percent, down from the June projection of 9.3 percent.
The growth rate for next year came down from 5 percent to