Federal Reserve Foresees Lower U.S. Unemployment Rate - KTVN Channel 2 - Reno Tahoe News Weather, Video -

Federal Reserve Foresees Lower U.S. Unemployment Rate

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The Federal Reserve expects the U.S. unemployment rate to fall faster this year and next than it did in March. 
 
The Fed now predicts unemployment will fall to 7.2% or 7.3% at the end of 2013 from 7.6% now. It thinks the rate will be between 6.5% and 6.8% by the end of 2014, better than its previous projection of 6.7% to 7%.
 
The 6.5% level is significant because the Fed has said it plans to keep the short-term interest rate it controls near zero at least until unemployment falls that low. The Fed thinks that level could be reached by the end of next year.
 
It also expects inflation to dip even further below its 2% target.

The Federal Reserve says it will maintain the pace of its program to keep long-term interest rates at record lows, but offered a slightly more optimistic outlook for the U.S. economy and job market.
 
The brighter outlook could be a hint that the Fed is moving closer to reducing its stimulus. But the statement gave no indication of when that might happen. 
 
In a statement after its meeting, the Fed says economy is growing moderately. And for the first time said the "downside risks to the outlook" had diminished since fall. 
 
The Fed says it will keep buying $85 billion a month in bonds until the outlook for the job market improves substantially. It's maintaining its plan to keep short-term rates at record lows at least until unemployment reaches 6.5%.  (AP)

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