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As recently reported by Bloomberg, the head of the Federal Reserve, Janet Yellen, is confident that the domestic economy is on solid ground and that the recent expansion will continue for the foreseeable future.Yellen made her comments after she attended a closed-door meeting in Washington, D.C. with colleagues in the Group of 30. They had the opportunity to meet as they and other economists and bankers from around the world visited Washington to attend the annual meeting of the World Bank and International Monetary Fund (IMF).
According to media reports, Yellen indicated that annual growth of the U.S. economy was on track to grow approximately 3% while inflation may rise by about 2%. That inflation rate was anticipated by the Fed, which attributes the uptick in inflation to the fact that more people are returning to the workforce as unemployment numbers shrink.
The stock market, which had been steadily losing ground, responded in a positive way to Yellen’s comments that appeared to bolster investor confidence in America’s economy. The markets had been rattled by geopolitical events in the Middle East, hysteria surrounding outbreaks of the Ebola virus, and sluggish economic activity across China and Europe.
“There is a great deal of uncertainty around the world right now,” explained Meghan Robinson, CEO of Sunovis Financial. “But here in the United States companies are enjoying robust growth and are breaking ground on long-delayed projects as sentiment improves, and economic data continues to reinforce increased optimism.”
The economy has grown at an annual rate of 2.2% since the Great Recession ended in 2009. At a press conference in September, Fed Chair Yellen said that decision makers at the Fed expected moderately-paced growth in the months ahead. Meanwhile, the dollar has been gaining value, which can reduce the amount of American exports. But strength in U.S. currency has been accompanied by continued low-interest rates, which are a powerful catalyst for growth and business expansion.
“Although the IMF has trimmed its outlook for global economic growth because of problems abroad,” said Robinson, “it simultaneously raised its forecast for growth here in the USA, bumping its prediction from 3% to 3.1%. That can be interpreted as yet another vote of confidence in the steadily accelerating American economy as we head toward 2015.”
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Name: Meghan Robinson
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Organization: Sunovis Financial
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