Fed lowers GDP forecast, holds policy steady

Reuters
November 2, 2011

The Federal Reserve on Wednesday slashed its forecast for economic growth, raised projections for unemployment, and suggested Europe’s debt crisis posed big downside risks to the U.S. economy.

However, it took note of a strengthening of the U.S. economy in the third quarter and held monetary policy steady.

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“Economic growth strengthened somewhat in the third quarter,” the central bank said in a post-meeting statement. “Nonetheless, recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated.”

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