Growth still wobbly, US Fed cuts forecasts
The Federal Reserve on Wednesday cut its forecasts for US economic growth, but offered no hint of further monetary support, saying the recovery should gradually pick up heading into 2012.business Updated: Jun 23, 2011 21:13 IST
The Federal Reserve on Wednesday cut its forecasts for US economic growth, but offered no hint of further monetary support, saying the recovery should gradually pick up heading into 2012.
Fed chairman Ben Bernanke said factors weighing on the economy, such as high commodity prices, should be fleeting but warned some of the weakness could linger.
"Part of the slowdown is temporary and part of it may be longer lasting," Bernanke told a news conference after a two-day Fed policy meeting.
The US central bank kept official interest rates at a historic low near zero and Bernanke signalled they will stay there at least through the end of the year.
The Fed estimated the economy should grow 2.7% to 2.9% this year, down from a forecast range of 3.1 to 3.3% made in April. It also said it sees 2012 growth in a range of 3.3% to 3.7%, lower than its previous forecast.
In a statement, the central bank said a jump in commodity prices and supply-chain disruptions from Japan's devastating earthquake had weighed on growth and pushed up prices, but that those factors should dissipate over time. The Fed also confirmed it was ending its $600 billion bond-buying programme at the end of June.
First Published: Jun 23, 2011 21:12 IST