US economy will shrink 6.5% this year, Fed forecasts

• Central bank paints bleak outlook for economy in 2020
• Federal Reserve to keep interest rates close to zero into 2022

The US economy will shrink by 6.5% this year, the Federal Reserve has forecast, announcing it would keep interest rates close to zero into 2022.

The US central bank's moves come as the economy struggles with the impact of the coronavirus pandemic. However, the Fed expects the US economy will return to growth in 2021, with unemployment falling to 9.3% and GDP increasing 5%, followed by 3.5% growth in 2022.

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