WASHINGTON, April 30, 2014 (AFP) – The US economy nearly froze in the glacial first quarter but emerging signs of vigor kept the Federal Reserve on its stimulus taper track Wednesday. The GDP data came as the World Bank reported Wednesday that China’s rapidly expanding economy could leapfrog the United States this year to become the world’s largest economy, on a purchasing-power basis.
Commonwealth’s Esiner said the recent improvements in the US economy should keep the Fed on track to wind down its asset-purchase program around the end of this year. Investors currently expect the Fed to begin lifting borrowing costs around the middle of 2015, he said.
“The largely benign Fed announcement today keeps the market’s focus squarely on Friday’s payrolls report for April,” he said.
The Labor Department is expected to report that the economy generated a net 210,000 new jobs in April, up from 192,000 in March, and that the unemployment rate slipped to 6.6 percent from 6.7 percent. The Fed shrugged off the shockingly weak 0.1 percent annual growth rate of the past quarter reported earlier in the day by the Commerce Department.
The Federal Open Market Committee, led by Fed Ch