The Federal Reserve Wednesday trimmed its economic outlook, while holding a key interest rate at the record low rate it’s been at since December 2008.
The Fed held the federal funds rate — the rate banks charge each other — at a zero to 0.25% rate.
The Federal Open Market Committee that while the economy has “strengthened somewhat in the third quarter,” it was still concerned about unemployment levels and a depressed housing sector.
Fed officials also lowered their outlook for U.S. economic growth in 2012, forecasting that the unemployment rate will average from 8.5% to 8.7% in the fourth quarter of 2012, Bloomberg reported.
Fed Chairman Ben Bernanke said at a press conference that “the pace of progress is likely to be frustratingly slow,” citing concerns about Europe contributing to “strains” in financial markets, Bloomberg reported.
The Fed’s five board members and 12 reserve bank presidents estimated 2.5% to 2.9% growth measured from the fourth quarter of this year to the fourth quarter of next year.
Fed officials in June had forecast growth of 2.7% to 2.9% for 2011, and the latest outlook for this year represents the third consecutive downward revision by Fed officials, Bloomberg said.
Economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013,” the Fed said.
Click here for the Fed’s full statement. (Federal Reserve website.)
