WASHINGTON — The Federal Reserve says the U.S. economy has strengthened after pausing late last year but still needs the Fed's extraordinary support to help lower high unemployment.
In a statement today after a two-day meeting, the Fed says it is standing by its plan to keep short-term rates at record lows at least until unemployment falls to 6.5 percent, as long as the inflation outlook remains mild. And it says it will continue buying $85 billion a month in bonds indefinitely to keep long-term borrowing costs down.
The unemployment rate fell to a four-year low of 7.7 percent in February, among many signs of a healthier economy. The Fed notes in its statement that the job market has improved. But its latest economic forecast maintains that unemployment won't reach 6.5 percent until 2015.
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.
Fed policymakers expect the economy to grow as little as 2.3 percent this year — not enough to quickly drive down unemployment — and 2.9 percent in 2014.