Federal Reserve Continues QE3, Improves Outlook for Unemployment

In a press conference today, the Federal Reserve announced it will keep interest rates low and leave QE3 unchanged, continuing to buy $85 billion a month in bonds to prop up the economy.

The Fed pegs the unemployment rate at 7.3 percent to 7.5 percent for this year, slightly better than their previous prediction three months ago of 7.4 percent to 7.7 percent. Next year’s forecast is 6.7 percent to 7 percent, also an improvement from the older estimate of 6.8 to 7.3 percent. For the first time, the Fed’s 2015 prediction indicates the unemployment rate will be at or under 6.5 percent, the target rate for ending QE3. Previous estimates put 2015’s unemployment rate at 6.0 to 6.6 percent.