Federal Reserve building

Fed Trims US Growth, Unemployment Forecasts

The inflation outlook also is more subdued than the Fed projected in September.

The Federal Reserve on Wednesday slightly lowered its U.S. economic growth forecasts through 2015 but projected the unemployment rate would fall a bit faster than it previously expected.

The 2012-2015 projections followed a historic Fed decision to tie a raise in its near-zero interest rate to unemployment and inflation targets for the first time.

The Fed forecast the world's largest economy would grow between 2.3% and 3% on an annual basis in the fourth quarter of 2013, instead of the 2.5%-to-3% range it had predicted in September.

The unemployment rate, currently at 7.7%, was expected to improve to a range of 7.4% to 7.7% by the end of next year, two-tenths of a point lower than the prior estimate range.

The inflation outlook was more subdued than the Fed projected in September, with downward revisions for each of the four years.

For 2013, the central bank cut the lower limit to 1.3% from 1.6%, while keeping the upper limit at 2.0 percent, its preferred level.

Copyright Agence France-Presse, 2012

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