Federal Reserve says economy is getting stronger
NBC NATIONAL NEWS — The Federal Reserve thinks the economy will grow and unemployment will slow down this year, despite high gas prices.
The Fed is warning if Congress lets income and Social Security taxes go up and automatic spending cuts kick in this year, that could pose a "significant risk" to an improving economy.
The Federal Reserve has boosted its outlook for the economy this year, now predicting growth up to 2.9%, and an unemployment rate as low as 7.8%.
"It's a little premature to declare victory. I think that keeping interest rates low is still appropriate for our economy," said Federal Reserve Chairman, Ben Bernanke.
Warm March weather helped boost construction but weak housing is still a challenge.
Demand for U.S. made goods hit a three year low, and high gas prices remain a problem.
Congress holds a hearing on that today, as Exxon Mobil reports first quarter earnings, and its biggest boost in quarterly dividends ever.
Touring a manufacturing plant in Oregon, the Treasury Secretary said things look good.
"We're gradually getting stronger. We're in much stronger shape than we were even six, nine, twelve months, eighteen months ago," said Treasury Secretary Tim Geithner.
Friday, congress is set to vote on preventing student loans from doubling July first.
"Stopping this from happening should be a no brainer," said President Barack Obama.
"Let's fix the problems for young Americans and leave the campaign theatrics for the Fall," said House Speaker John Boehner, Ohio.
But they disagree on how to do it.
The Republican bill set for a vote tomorrow would pay for lower student loan rates by cutting President Obama's health plan.