Thaindian News

Washington, Feb 16 (IANS) The US Federal Reserve Wednesday said it expected the US economy to continue expanding slowly in coming quarters, as it was weighed down by a string of headwinds, including waning domestic demand and eurozone debt crisis.

“The staff’s projection for the growth in real gross domestic product (GDP) in the near term was revised down a bit. The revision reflected the apparent decline in federal defense purchases and the somewhat shallower trajectory for consumer spending in recent months,” the central bank said in the minutes of a January Federal Open Market Committee (FOMC) meeting released Wednesday.

The central bank predicted the US economy would expand by 2.2 percent to 2.7 percent in 2012, down from its November estimate range of 2.5 to 2.9 percent, reported Xinhua.

The US Federal Reserve announced no new steps in its monetary policy at the meeting as Fed officials were divided over the timing of additional moves, but pledged to keep the exceptionally low levels of federal funds rate at least through late 2014 to boost economic recovery.

“In their discussion of the economic situation and outlook, meeting participants agreed that the information received since the Committee met in December suggested that the economy had been expanding moderately, notwithstanding some slowing in growth abroad,” noted the minutes.

Labour market indicators pointed to some further improvement, but progress was gradual and the unemployment rate remained elevated, added the Fed.

“Participants generally anticipated that economic growth over coming quarters would be modest and, consequently, expected that the unemployment rate would decline only gradually,” said Fed officials.

When US Federal Reserve Chairman Ben Bernanke last week testified to the Senate Budget Committee, he said that the pace of the US economic recovery remained “frustratingly slow” and the 8.3 percent unemployment rate showed continuing weakness of the labour market.