Fed forecasts gradual monetary tightening, modest US growth
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Washington - Members of the Federal Reserve's monetary policy committee expect the central bank's key interest rate to rise gradually in the coming years.
The median forecast in a survey of Fed members is for the benchmark rate, which banks pay for overnight loans, to hit 1.4 per cent by the end of 2016.
Fed members give a median forecast for US gross domestic product growth of 2.4 per cent next year and a longer run rate of 2 per cent.
Inflation is expected to jump from 0.4 per cent this year to 1.6 per cent in 2016, before rising by 2018 to the Fed's inflation target of 2 per cent. US unemployment, now 5 per cent, is forecast to level off at 4.7 per cent.
DPA
