Mr Bernanke has used the event, a conference of the world’s central bankers, to indicate the Fed’s intentions. So far, the Fed has kept base interest rates near zero for almost the last four years and injected $2.3 trillion into the US economy.
The US Congress’s budget office last week warned that spending cuts and tax rises could trigger a sharp economic slowdown in 2013. In its report, it expected the US recovery “to continue at a modest pace” for the rest of 2012 but warned that “substantial changes to tax and spending policies” would cause the US to tip back into recession next year.
The 1.7% annualised pace in ahead of previous estimates of 1.5%, unemployment is still above 8% and the economy is shaping up to be one of the biggest issues of this year’s US presidential election, which sees President Barack Obama take on Republican rival Mitt Romney.
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