Fed Trims Growth Forecasts; Inflation Projections Unchanged

" Federal Reserve policy makers trimmed their forecasts for U.S. economic growth this year and next on weaker-than-anticipated home building, while keeping their inflation projections unchanged.

The economy will grow by 2.25 percent to 2.5 percent in the fourth quarter of 2007 from a year before, compared with a range of 2.5 percent to 3 percent given in February, the Fed said in its semiannual monetary policy report to Congress. The central bank's preferred inflation gauge will rise by 2 percent to 2.25 percent this year, the same range as in the last report.

The lack of any major shift in policy makers' outlook may reinforce investors' expectations that Chairman Ben S. Bernanke and his colleagues will keep interest rates unchanged into next year. Bernanke said in prepared testimony today that economic growth will pick up in 2008 and inflation should ease. "

Source: Fed Trims Growth Forecasts; Inflation Projections Unchanged (http://www.bloomberg.com/apps/news?pid=20601068&sid=aOI6Ky7KGIQA&refer=economy)