The Fed lowered its forecast for U.S. economy for this and next year and said it may take several years until the economy fully recovers. According to the transcript of the meeting of the Fed’s Nov. 3, which was published on Tuesday, more than half of the directors of the Central Bank believe that it will take about 5 or 6 years, so that unemployment, growth and inflation to return to more normal levels. Other representatives of the Fed warned that full recovery may take even more time. Much lower estimate is the main reason the Fed’s directors decided earlier this month to announce a plan for injection of liquidity amounting to 600 billion dollars that the central bank to acquire long-term U.S. bonds. The plan was criticized by some economists, politicians and representatives of foreign central banks. The Fed expects the economy to grow by between 2.4 percent and 2.5 percent this year, compared with an earlier forecast for growth of 3.0% – 3.5%. The U.S. Department of Economy announced on Tuesday that the economy grew by 2.5 percent in the third quarter, compared with 1.7 percent in the second but less than 3.7 percent during the first three months of the year.
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The Consumer loans in the United States in January unexpectedly increased by $ 5 billion or an annual rate of 2.4 percent. With the largest contribution to growth is the increase in loans to buy cars. The data of the Federal Reserve (U.S. central bank) for December were revised down. In the last month of last year loans fell 4.6 billion dollars instead of the original estimate of a decline of 1,7 billion. After initial assessment in December, economists predicted a decline in January amounted to 4,5 billion dollars. This is the first increase in loans last year and shows that consumer confidence in the U.S. economy growing. “This is a sign that the economy is on the bottom and consumers begin to spend again,” said Chris Rapkey, an economist at Bank of Tokyo-Mitsubishi. “The increase in loans kicks prospects for the economy this year.” Consumer spending represents 70% of GDP.
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The Argentine court ordered the governor of the Argentine Central Bank Martin Redrado be restored to the position and block plan of the country’s president Cristina Fernandez de Kirchner to use foreign reserves to pay external debt, reported BBC. The court decided the emergency decree of the President for the release of Redrado be suspended until the vote on the country’s parliament. The court also held that the government can not pass 6.6 billion by the central bank in a special fund. Redrado angered the president by refusing to transfer to the reserves. He said he would wait for parliament to ratify the measure. Argentina must meet the 13 billion dollar international debt this year and has a budget deficit of between 2 and 7 billion dollars. In two rulings on Friday Judge Maria Jose Sarmiento thwart the efforts of the President to use forex reserves for the payment of Argentina’s debt and its decision to dismiss Redrado. Sarmiento agreed with lawyers Redrado under which the president has no power needed.
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