Fed Projects High U.S. Unemployment into 2015
WASHINGTON (AP) - The Federal Reserve sees unemployment remaining high into 2015, suggesting it will keep short-term interest rates near record lows at least until then.
In its latest economic forecasts, the Fed predicts the unemployment rate will stay above 6.5 percent for about two more years. Policymakers also expect the economy to grow modestly this year and next despite economic gains so far in 2013.
The Fed's updated forecasts are nearly identical to projections it made in December. The Fed has said it plans to keep its benchmark rate near zero as long as unemployment exceeds 6.5 percent and the inflation outlook is tame.
Fed policymakers expect the economy to grow as little as 2.3 percent this year - not enough to quickly drive down unemployment - and 2.9 percent in 2014.