US recovering faster than expected: Tim Geithner

The US economy is improving at a much faster pace than had been anticipated, even as aggressive policy measures taken by governments across the globe have thwarted the risk of a much deeper recession, Treasury Secretary Timothy Geithner said. "In the US, the rate of decline in economic activity has slowed, business and consumer confidence has started to improve, housing markets have begun to stabilize, the cost of credit has fallen significantly and credit markets are opening up," Geithner said in a prepared speech in Jeddah, Saudi Arabia. These improvements have been more substantial and have come more quickly than many expected when the Obama administration was designing the stimulus programs in December and January, he said.

Meanwhile, the Federal Reserve raised its economic projections. In "central tendency" forecasts released with the minutes of its June policy meeting, the Fed raised its 2009 and 2010 GDP forecasts, even while saying that the US economy could take up to six years to resume trend growth. GDP for 2009 was pegged at -1.5% to -1.0% against the previous range, from April, of -2.0% to -1.3%. For 2010, growth was forecast at 2.1 to 3.3%, up from 2 to 3% in April.