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The Fed lowers unemployment forecast but also cuts GDP growth projections

FXstreet.com (San Francisco) - The Federal reserve has decided to leave unchanged its interest rate at the 0.0/0.25% range and to maintain $85Bn monthly a bond buying program, according to a press release published in the FOMC. The Fed also has released its economic projections for 2013, 2014 and 2015. The fed has

The Fed has lowered the unemployment projection to 2013 to 7.3% to 7.5% from 7.4% to 7.7% expected in December. In 2014, the rate will drop to a range between 6.7% and 7.0%. In 2015, the rate is expected at 6.0%-6.5%.

Despite the unemployment rate will fall faster than previously expected, the Fed has cut slightly the economic outlook for 2013 to the 2.3% to 2.8% range from the 2.3% to 3.0% expected in December. In 2014 the new range will be 2.9% to 3.4%, below 3.0% to 3.5% expected in December.

The Fed has commented that the economy has returned to moderate growth in the recent months after the Q4 pause. However, "Labor market conditions have shown signs of improvement in recent months but the unemployment rate remains elevated," according to the official release.

" The Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective. "

According to the Fed, "fiscal policy has become somewhat more restrictive" and they expect "with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate."

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