WASHINGTON — Federal Reserve officials lowered their GDP and other projections “modestly” due to financial conditions, but not enough to warrant further policy accommodation, according to the Federal Open Market Committee meeting minutes released Wednesday.
Members cut their GDP projections to a range of 3.0% to 3.5% for 2010, down from a range of 3.2% to 3.7% at the June 22-23 meeting. Their unemployment forecast was revised upward to 9.2% to 9.5% for 2010 from the April range of 9.1% to 9.5%. Estimates for core personal consumption expenditures were revised downward to 0.8% to 1.0%, from 0.9% to 1.2%.
Several Fed officials said they anticipated conditions “the next several years” in which employment and inflation would be inconsistent with the Fed’s dual mandate of price stability and full employment.
Participants said they expect to see the pace of hiring remain low for some time. Some also said high unemployment and downward inflation could “reinforce disinflationary pressures.”