People blow whistles and horns during a demonstration against job cuts at bailed-out bank Bankia in Madrid Wednesday Jan. 23, 2013. Spain's recession deepened in the fourth quarter of 2012, when the economy shrank by 0.6 percent compared with the previous three-month period, according to preliminary estimates from the Bank of Spain on Wednesday.(AP Photo/Daniel Ochoa de Olza)
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People blow whistles and horns during a demonstration against job cuts at bailed-out bank Bankia in Madrid Wednesday Jan. 23, 2013. Spain's recession deepened in the fourth quarter of 2012, when the economy shrank by 0.6 percent compared with the previous three-month period, according to preliminary estimates from the Bank of Spain on Wednesday.(AP Photo/Daniel Ochoa de Olza)
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FILE - In this March 5, 2009, file photo, Job seekers join a line of hundreds of people at a job fair sponsored by Monster.com in New York. The Federal Reserve projects the unemployment rate will stay elevated until late 2015, suggesting it will keep short-term interest rates low for the next three years. (AP Photo/Mark Lennihan)
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FILE - In this Thursday, Oct. 18, 2012, file photo Pedestrians walk past the Federal Reserve Bank of New York in New York. The Federal Reserve is signaling that it will likely launch a new bond buying program in December to try to spur job growth. The purchases would be intended to lower long-term borrowing rates to encourage spending and strengthen the economy. The hope is that more hiring would follow. (AP Photo/Seth Wenig, File)
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In this Tuesday, Jan. 8, 2013 photo, shipping containers are shown stacked at the Port of Miami in Miami. More expensive food and soda helped drive up a measure of U.S. wholesale prices in January, though overall, inflation stayed tame. The Labor Department says the producer price index increased 0.2 percent last month, the first increase since September. The index measures the cost of goods before they reach consumers. Food prices jumped 0.7 percent, after a steep decline in December. Gasoline and other energy prices fell. (AP Photo/Wilfredo Lee)
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Federal Reserve Chairman Ben Bernanke speaks during a news conference at the Federal Reserve Board in Washington, Wednesday, Dec. 12, 2012, following the Federal Open Market Committee meeting. The Federal Reserve sent its clearest signal to date Wednesday that it will keep interest rates super-low to boost the U.S. economy even after the job market has improved significantly. (AP Photo/Manuel Balce Ceneta)
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FILE - In this Wednesday, Dec. 12, 2012 file photo, Federal Reserve Chairman Ben Bernanke speaks during a news conference at the Federal Reserve Board in Washington. Federal Reserve policymakers expressed broad support in December 2012 for the Fed's plan to buy bonds to support the U.S. economy. But they differed over how long to keep buying bonds to drive down long-term interest rates. Minutes of the Fed's December policy meeting show that some of the 12 voting members thought the bond purchases would be warranted through the end of 2013. (AP Photo/Manuel Balce Ceneta, File)
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FILE-In this Tuesday, Aug. 7, 2012, file photo, Federal Reserve Chairman Ben Bernanke speaks to educators in the board room of the Federal Reserve in Washington. Federal Reserve officials spoke with increased urgency Wednesday, Aug. 22, 2012, at their last meeting about the need to provide more help for a weak U.S. economy. The minutes of the July 31-Aug. 1 meeting show many members feeling further support would be needed "fairly soon" unless the economy improved significantly. (AP Photo/Manuel Balce Ceneta)
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Traders work on the floor of the New York Stock Exchange, Wednesday, Jan. 30, 2013. The Federal Reserve says growth "paused" in recent months and reaffirmed its commitment to boost a sluggish U.S. economy by keeping borrowing cheap for the foreseeable future. (AP Photo/Richard Drew)
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A television screen in a post on the floor of the New York Stock Exchange shows the decision of the Federal Reserve, Wednesday, Jan. 30, 2013. The Federal Reserve says growth "paused" in recent months and reaffirmed its commitment to boost a sluggish U.S. economy by keeping borrowing cheap for the foreseeable future. (AP Photo/Richard Drew)
Fed projects high US unemployment into 2015
WASHINGTON (
AP) — The Federal Reserve foresees unemployment remaining high into 2015, suggesting it will keep short-term interest rates near record lows at least until then.
In its latest economic forecasts released Wednesday, the Fed predicts that the unemployment rate will stay above 6.5 percent for about two more years. Fed policymakers also expect the economy to grow modestly this year and next despite economic gains so far in 2013.
The Fed's updated forecasts are nearly identical to projections it made in December. The Fed has said it plans to keep its benchmark rate near zero as long as unemployment exceeds 6.5 percent and the inflation outlook is tame.
The policymakers expect the economy to grow as little as 2.3 percent this year — not enough to quickly drive down unemployment — or as high as 2.8 percent. In 2014, growth could range from 2.9 percent to 3.4 percent in 2014, they predict.
The Fed has slightly upgraded its outlook for unemployment. It now sees the rate falling to between 7.3 percent and 7.5 percent by the end of this year. That's down from a previous range of 7.4 percent to 7.7 percent.
The rate fell to 7.7 percent in February, the lowest in four years.
By the end of 2014, the Fed expects the rate to fall between 6.7 percent and 7 percent. That's a narrower range than in December, when it forecast a range of 6.8 percent to 7.3 percent.
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