Coincidentally, the Federal Reserve had a meeting scheduled this week, with plans to make its latest announcement about the health of the economy on the same day that the Bureau of Economic Analysis released its first estimate of GDP growth for the second quarter. Their outlook seemed to parallel the GDP report, which at 1.7 percent growth was better than many expected but far short of exciting. The Fed, meanwhile, changed its assessment of our economic growth from "moderate" to "modest."
Perhaps most interesting, the Fed noted that there may be problems from an inflation rate that is running lower than desired. The Fed's target for inflation is 2 percent, but it's been closer to 1 percent in recent months. It also said that it expected both that inflation rate and overall GDP growth to increase in the second half of the year.
The Fed had said earlier that one of the conditions under which it will raise interest rates is if the inflation rate reaches 2 percent. As long as it's comfortably under that figure, we could see the Fed keep its foot on the gas for a while longer.
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