Federal Reserve policymakers are seeing 'tentative evidence' the US economy is emerging from recession and could show modest growth in the second half of 2009, minutes released last night showed.
The central bank revised its economic outlook to show a drop in US output to a range of between 1.3-2% over 2009, but said some of the worst declines may be over.
While that was weaker than the range of a 0.5-1.3% decline in the last official forecast in February, the minutes said the Fed staff had revised up its more recent outlook 'in response to recent favourable financial developments as well as better-than-expected readings on final sales.'
The minutes from the April 28-29 Federal Open Market Committee meeting showed a slightly more optimistic tone from central bank policymakers although they noted a range of ongoing economic and financial market woes.
'Participants agreed that the information received since the March meeting provided some tentative evidence that the pace of contraction in real economic activity was starting to diminish,' the minutes showed.
'Participants noted that financial market conditions had generally strengthened, and surveys and anecdotal reports pointed to a pick-up in household and business confidence, which nonetheless remained at very low levels,' they added.
The Fed staff forecast prepared for the meeting showed a growing number of signs that the recession that began in December 2007 was easing.
