Yesterday’s update of the Federal Reserve’s quarterly economic forecast is a minor triumph for optimism. The central bank still expects that US GDP in 2015 will increase in the range of 2.6% to 3.0%, unchanged from its previous estimate in September. That’s a mild expansion, but it’s a step up from the Fed’s 2.3%-to-2.4% GDP outlook for this year. In a word, progress. Forecasting year-ahead GDP is subject to any number of risks, of course, and so it’s best to take the Fed’s prediction with a grain of salt. Yet it’s clear that the bank’s policymakers are becoming more confident that the US economic expansion will strengthen a bit in the year ahead. Events abroad may intervene and render the current outlook null and void, but based on what we know today the US macro trend is on track to start the new year with a moderately improving tailwind.
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