The recent sustained run of stronger economic data, particularly on the labour market, has persuaded us to raise our GDP growth forecast to 2.0% this year, from 1.5%. We are also nudging up our 2013 growth forecast to 2.5%, from 2.0%. But despite these revisions, we still think the Fed will fulfill its conditional commitment to leave short-term interest rates near zero until at least late 2014.
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