The Federal Reserve Open Market Committee predicts the economy will grow just 1.6 to 1.7 percent in 2011 and estimates growth to be between 2.5 and 2.9 percent in 2012. Both estimates are lower than expected growth numbers released by the Fed over the summer.
The central bank expects unemployment of between 8.5 and 8.7 percent next year, not the drop in unemployment it had previously expected.
“Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate.” The Fed said in a release.
While the most recent information indicates that no immediate action will take place on the part of the Fed to stimulate markets, the option remains on the table in the form of stimulus and lowering interest rates.
Fed Chairman Ben Bernanke said that he is dissatisfied with the slow economic growth and that criticism from Republicans, charging that further Fed action will send inflation soaring, was unsubstantiated, according to The Associated Press.