US economy to grow faster than expected, says Fed

The Federal Reserve expects much stronger growth this year than previously forecast. as vaccination rates rise and government relief funds start flowing into the economy.

The Federal Reserve forecast average growth of 6.5% this year—up from the 4.2% it predicted in December—on the back of vaccination rates and government stimulus checks.

The outlook for recovery in the jobs markets has also brightened, the Fed said.

Despite the good news, officials did not move to raise interest rates. And most members expect to keep borrowing costs near zero beyond 2023, according to projections released by the Fed after its regular meeting.

Federal Reserve Chair Jerome Powell said the bank wanted to see proof of a more complete recovery before altering its policies, which are focused on stimulating economic activity.