The US Federal Reserve has predicted that inflation will remain low in 2014, providing a clear signal that it is likely to ease policy further.
Most Fed officials forecast inflation will sit at between 1.5 and 2 per cent over the next three years. That compares with the central bank’s unofficial goal of “2 per cent or a bit below” and would provide room for it to ease monetary policy.
While further easing could involve a third round of quantitative easing – or QE3 – the Fed made no change to its monetary policy on Wednesday.
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