Federal Reserve Sharply Cuts Forecast for U.S. Economic Growth - KTVN Channel 2 - Reno Tahoe News Weather, Video -

Federal Reserve Sharply Cuts Forecast for U.S. Economic Growth

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The Federal Reserve has sharply cut its forecast for U.S. growth this year, reflecting a shrinking economy last quarter caused mostly by harsh weather.
 
At the same time, the Fed has barely increased its estimate of inflation despite signs that consumer price increases are picking up. The Fed's benign inflation outlook suggests it doesn't feel rising pressure to raise short-term interest rates.
 
The Fed expects growth to be just 2.1% to 2.3% this year, down from 2.8% to 3% in its last projections in March. It thinks inflation will be a slight 1.5% to 1.7% by year's end, near its earlier estimate.
 
Still, more Fed members than in March expect its short-term rate to be 1 percent or higher by the end of 2015.   (AP)
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