The U.S. economy is expected to grow between 3.1 percent and 3.3 percent this year, a downward revision from the previous forecast which saw growth possibly as high as 3.9 percent, said Ben Bernanke, chairman of the Federal Reserve, on Wednesday.


ECONOMIC SITUATION


Growth would be "a relatively weak number" in the first quarter, which reflects the rising oil and food prices, Bernanke said at a historic press conference after the meeting of the Federal Open Market Committee (FOMC), the interest rate policymaking body of the central bank.
It is the first time in the history of the 98-year-old central bank that a chairman has begun holding regular press conference. It is seen as the Fed's response to the criticism that its monetary policymaking process is not transparent enough.


But the slowdown in the first quarter is viewed as "transitory", Bernanke said.


In an updated forecast released on Wednesday, the Fed also downwardly revised its expectation for the U.S. growth in 2012 from 3.5-4.4 percent, as announced in January, to 3.5-4.2 percent. Longer run economic outlook is forecast to remain unchanged.


Bernanke noted that the U.S. labor market is "improving gradually". Unemployment rate, currently at 8.8 percent, is projected to fall to the range of 8.4-8.7 percent at the end of this year. The Fed previously expected the figure to be at 8.8-9.0 percent in its January forecast.


The price index for personal consumption expenditures (PCE), the indicator to measure inflation, is projected to grow at the range of 2.1-2.8 percent. That is much higher than the Fed's January forecast of 1.3-1.7 percent.


For the core inflation, which excludes volatile food and fuel prices, the Fed sees a 1.3-1.6 percent increase in 2011. That is slightly higher than January's forecast of 1.0-1.3 percent.


Core inflation expectation remains stable and within the Fed's ideal range of below 2 percent, according to Bernanke.


VietNamNet/Xinhuanet