WASHINGTON (AP) — Federal Reserve officials expect the U.S. economy to grow at a slightly slower but steady pace in 2014.
The Fed on Wednesday projected growth of 2.8 percent to 3 percent this year, a bit lower than its December projection of between 2.8 percent and 3.2 percent.
The forecast suggests that Fed policymakers will continue to pare their monthly bond purchases, which are intended to stimulate growth by keeping interest rates low. The Fed's first policymaking meeting under new Chair Janet Yellen ended Wednesday.
The projections also showed that Fed officials now think its short-term benchmark interest rate will rise slightly faster in 2015 than they thought three months ago. Most Fed policymakers say the rate will be 1 percent or higher by the end of 2015. In December, a majority thought it would be less than 1 percent by then.
The Fed expects unemployment to fall further this year than it thought in December. It forecasts that the unemployment rate will drop to 6.1 percent to 6.3 percent by the end of this year, down from its December projection of 6.3 percent to 6.6 percent.
Fed officials expect the same pattern next year: They are now forecasting growth of 3 percent to 3.2 percent, down from 3 percent to 3.4 percent.
But despite the slower growth, the Fed thinks unemployment will fall further, to 5.6 percent to 5.9 percent. That's down from its projection in December of 5.8 percent to 6.1 percent.
The Fed releases its economic projections four times each year. The forecasts serve as guides for its interest rate decisions.
Thirteen of the 16 members of the Fed's policymaking committee support keeping its benchmark interest rate at nearly zero until 2015. One member supports increasing it this year. Two support delaying an increase until 2016. That's little changed from September.
The Fed's policymaking committee sees little change in inflation, which it expects will be 1.5 percent to 1.6 percent this year, below its 2 percent target.