The Federal Reserve released a statement on Wednesday forecasting good news for the economy.
“Information received since…July indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year,” the Fed’s statement said. “Job gains have remained solid in recent months, and the unemployment rate has stayed low.” The statement also noted that household spending and business investment continues to grow.
The Fed is projecting median GDP growth of 2.4%, which is more optimistic than the 2.2% projection during the summer. This optimism is despite the devastation Hurricanes Harvey and Irma wreaked on Houston, Florida, and the southeast.
Based on this information, the Fed will continue to normalize its balance sheet in the wake of the 2008 financial crisis. The organization will also go ahead with another planned interest rate increase before the year is out.
“We’re working down our balance sheet because we feel that is stimulus that in some sense is no longer needed,” Federal Reserve Chairman Janet Yellen said. “The basic message here is that U.S. economic outlook has been good.”
All of this is positive news, given that the Fed exhausted all of its resources to prevent the economy from further crashing nine years ago. Since then, the economy was seen as too fragile to begin raising rates or normalizing the balance sheet. Still, the Fed will continue to cautiously return to normalcy as the economy continues to stand on its own two legs again.