Fed lowers US economy forecast

The Federal Reserve has lowered its projection for US economic growth this year, citing damage from the double blows of a housing slump and credit crunch and saying it also expected higher unemployment and inflation.

The updated forecasts come at a time Federal Reserve chairman Ben Bernanke and his colleagues are concerned the economy could continue to weaken, even after the US central bank’s aggressive interest rate cuts in January, according to minutes of those private deliberations released yesterday.