Stronger recovery will allow Fed to wind down QE

As the fading fiscal drag more than offsets any impact from a modest further rise in long-term interest rates, we expect economic growth to accelerate from 1.8% this year to 2.5% in 2014 and further to 3.0% in 2015. The Fed will begin to wind down its asset purchases within the next couple of months, but it won't begin to raise short-term interest rates until sometime in 2015, by which point the unemployment rate may be close to 6.0%.