Fed Foresees Steady Growth Despite Winter Setbacks - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Fed Foresees Steady Growth Despite Winter Setbacks

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Federal Reserve officials expect the U.S. economy to grow at a steady if modest pace in 2014 despite weather-related setbacks this winter. 
 
The Fed forecasts growth of 2.8% to 3% this year, a bit lower than its December projection of between 2.8% and 3.2%.   
 
The forecast suggests that Fed policymakers will continue to pare their monthly bond purchases, which are intended to stimulate growth by keeping interest rates low. The Fed's first policymaking meeting under new Chair Janet Yellen ended Wednesday.
 
The Fed expects unemployment to fall further this year than it thought in December. It forecasts that the unemployment rate will drop to 6.1% to 6.3% by the end of this year, down from its December projection of 6.3% to 6.6%. 

Meanwhile, the Federal Reserve is seeking to clarify when it might start to raise short-term interest rates from record lows.
 
The Fed also says it will cut its monthly long-term bond purchases by another $10 billion to $55 billion because it thinks the economy is strong enough to support further improvements in the job market.
 
The Fed is reaffirming its plan to keep short-term rates low to help support the economy. But it no longer mentions a specific unemployment rate that might lead it eventually to raise short-term rates. The Fed says instead it will monitor "a wide range of information" on the job market, inflation and the economy before approving any rate increase. (AP)

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