Fed still too hopeful on growth

Even after the downward revision announced at last week's first ever post-policy meeting press briefing, the Fed's new forecasts for economic growth still look a bit optimistic. In the light of the weak start to the year, we now expect the economy to grow by 2.5% this year, down from our previous forecast of a 3% expansion. If we're right, the Fed will not take any steps to tighten policy this year, and perhaps not even next year either.