WASHINGTON — The Federal Reserve downgraded its view of the U.S. economy Wednesday after a winter in which growth nearly froze. The Fed offered no sign that a rate increase might be coming soon.
On a day when the government estimated that the economy barely grew in the January-March quarter, the Fed acknowledged that economic barometers have weakened recently, in part because of temporary factors. It noted in a statement that growth has slowed, business investment has softened and exports have declined.
It also reiterated that it needs to be “reasonably confident” that low inflation will move back up to the Fed’s 2 percent target.
The only parts of its policy statement the Fed changed Wednesday dealt with its assessment of economic conditions.
David Jones, an economist who has written several books on the Fed, said he thinks a rate hike is unlikely until September. “There is no question that the statement was full of negatives about the economy, but I think the Fed believes most of the slowdown will be temporary,” Jones said.
