The US Federal Reserve has cut its economic growth forecast for this year, citing weaker growth than expected in the first three months of the year.
Chairman Ben Bernanke said he expected growth for 2011 to be between 3.1% and 3.3%, compared with the previous forecast of 3.4% to 3.9%.
First quarter growth would probably be under 2%, due to lower defence spending and weaker exports, he said.
Mr Bernanke is giving his first press conference.
Monetary stimulusEarlier, the Fed kept interest rates at between zero and 0.25%.
The US central bank said "economic recovery is proceeding at a moderate pace" while the labour market "improves gradually".
In its interest-rates statement, the Fed said household spending and business investment in equipment and software continued to grow. However, it highlighted that the housing market remained depressed.
It also said it would continue with its stimulus policy, known as quantitative easing, and would complete its second round of purchases totalling $600bn (£363bn) as scheduled by the end of June.
Mr Bernanke is outlining the views of central bank board members on rates as well as give his overall outlook for the US economy.
Investors around the world are watching his words closely.
Open discussionIn his first news conference, Mr Bernanke is likely to discuss the recent move by international ratings agency Standard & Poor's to put the US on a negative outlook.
It said the US could lose its top-level credit rating due to the lack of a plan to bring down its growing deficit and tackle its debt.
Although the Fed is not responsible for the US government's high debt levels, the media will expect Mr Bernanke to hold strong views about how and when this should be addressed.
The introduction of regular press conferences by the chairman of the Fed is seen as a way for the bank to explain its decisions and address criticisms of its handling of the financial crisis, and even its inability to prevent it in the first place.
The US economy grew by an annualised rate of 3.1% in the final three months of last year, but some economists expect the rate of growth to have slowed in the first quarter of this year.
The January-to-March GDP figures are published on Thursday.
The US unemployment rate is also falling, and hit a two-year low of 8.8% in March. However, inflation jumped last month to 2.7%, largely owing to rises in food and petrol prices. The Fed said on Wednesday that it expected these particular inflationary pressures to be "transitory".
This mixed picture is the main reason why the Fed kept rates at a record low of zero to 0.25%, where they have been since December 2008.
Chairman Ben Bernanke said he expected growth for 2011 to be between 3.1% and 3.3%, compared with the previous forecast of 3.4% to 3.9%.
First quarter growth would probably be under 2%, due to lower defence spending and weaker exports, he said.
Mr Bernanke is giving his first press conference.
Monetary stimulusEarlier, the Fed kept interest rates at between zero and 0.25%.
The US central bank said "economic recovery is proceeding at a moderate pace" while the labour market "improves gradually".
In its interest-rates statement, the Fed said household spending and business investment in equipment and software continued to grow. However, it highlighted that the housing market remained depressed.
It also said it would continue with its stimulus policy, known as quantitative easing, and would complete its second round of purchases totalling $600bn (£363bn) as scheduled by the end of June.
Mr Bernanke is outlining the views of central bank board members on rates as well as give his overall outlook for the US economy.
Investors around the world are watching his words closely.
Open discussionIn his first news conference, Mr Bernanke is likely to discuss the recent move by international ratings agency Standard & Poor's to put the US on a negative outlook.
It said the US could lose its top-level credit rating due to the lack of a plan to bring down its growing deficit and tackle its debt.
Although the Fed is not responsible for the US government's high debt levels, the media will expect Mr Bernanke to hold strong views about how and when this should be addressed.
The introduction of regular press conferences by the chairman of the Fed is seen as a way for the bank to explain its decisions and address criticisms of its handling of the financial crisis, and even its inability to prevent it in the first place.
The US economy grew by an annualised rate of 3.1% in the final three months of last year, but some economists expect the rate of growth to have slowed in the first quarter of this year.
The January-to-March GDP figures are published on Thursday.
This mixed picture is the main reason why the Fed kept rates at a record low of zero to 0.25%, where they have been since December 2008.
