Fed tweaks expectations higher

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WASHINGTON, Feb. 16 (UPI) -- The U.S. Federal Reserve's meeting minutes for a late January meeting revealed the central bank expected faster growth in 2011 than previously thought.

Meeting minutes released Wednesday projected economic growth for the year to rise 3.4 percent to 3.9 percent. In November, the Fed pegged growth for the year at 3 percent to 3.6 percent.

The Fed left its projection on employment largely unchanged, forecasting 8.8 percent to 9 percent unemployment for the year, a slight improvement from November's expectations of 8.9 percent to 9.1 percent unemployment.

Inflation projections were also largely unchanged. The Fed said prices would rise 1.3 percent to 1.7 percent. In November, the central bank put inflation at between 1.1 percent and 1.7 percent. Core prices, which exclude food and energy prices, are expected to grow 1 percent to 1.3 percent this year.

Fed policymakers in January elected to keep a $600 billion securities purchasing program on track and to keep bank-to-bank lending rates at zero to 0.25 percent.

Policymakers said a recent upswing in consumer spending "could prove short lived given that a good portion of it appeared to have occurred in relatively volatile categories such as autos."

The bank's staff projected a slow recovery in employment as "the jobless rate was anticipated to remain elevated at the end of 2012," the meeting minutes said.