The median projection by U.S. Federal Reserve rate setters of 7% economic growth in 2021 is slipping out of reach, Bloomberg Economics’ updated forecasts suggest. The main factor behind the downward revision to 6.3% — which matches the bottom end of the range Fed officials penciled in at their June meeting — is an inability of the supply side of the economy to support faster inflation-adjusted growth, not the delta variant. Provided employment gains remain on track, any reduction in near-term growth projections at the September meeting should not significantly impact the policy debate.

Posted in: USA