In view of the progressive reduction in unutilized capacity, the Federal Reserve began to raise the federal funds rate at a measured pace, so that it now stands at 1.75 per cent. The budget deficit, after worsening progressively for three years, has stabilized in 2004, thanks to the growth of the economy.
According to the estimates put out by the Congressional Budget Office, the federal deficit, including the social security balances, was 3.6 per cent of GDP in fiscal 2004, virtually unchanged compared with the previous fiscal year and 0.5 percentage points less than estimated in the spring.