The US economy has grown by 4% as the stimulus is cut

it is reported that the United States economy grew at a high rate of 4% during the months of April to June. The United States Department of Commerce have reported that the growth during this second quarter now has reversed the contraction seen at the start of the first period in the current year.

Now growth is forthcoming the Federal Reserve would start to ease the economic stimulus, it is expected that the Federal Reserve will reduce it`s monthly bond purchased from $35 billion to $25 billion.

However the growth is now leading to inflation fears, the US labour market is a lot weaker than predicted and this could lead to higher inflation when combined with low interest rates, which are suggested to remain low until mid 2015. Low inflation rates could increase inflation, inflation increased by 1.9% in the first quarter of 2014, it is higher than the 1.4% target.

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