Fed gloomy on 2009, more bullish on 2010 and 2011

The Federal Reserve has reduced its forecast for economic growth this year, but has upgraded its projection for 2010 and 2011.

The Fed now expects the US economy to shrink by between 0.5% and 1.3% this year. The forecast was contained in the quarterly summary of economic projections of the Federal Open Market Committee (FOMC), which were released this week along with the minutes of the committee's January meeting. The October forecast saw a change in real GDP of between -0.2% and 1.1% for 2009