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Ben Bernanke
FILE- In this Thursday, July 18, 2013, file photo, Federal Reserve Chairman Ben Bernanke, arrives to testify before the Senate Banking, Housing, and Urban Affairs Committee hearing on "The Semiannual Monetary Policy Report to the Congress” on Capitol Hill in Washington. The Federal Reserve issues a statement after its two-day policy meeting ends on Wednesday, July 31, 2013.(AP Photo/Manuel Balce Ceneta, File)

Fed Downgrades US Economic Growth to Modest

WASHINGTON (AP) - The Federal Reserve says the U.S. economy is growing modestly, a downgrade from its June assessment. The Fed expects growth will pick up in the second half of the year, but the more cautious message may signal it's not ready to slow its bond purchases soon.
In a statement after a two-day policy meeting, the Fed says it will keep buying $85-billion-a-month in bonds to help lower long-term interest rates. And it says it plans to hold its key short-term rate at a record low near zero at least as long as the unemployment rate stays above 6.5 percent and the inflation outlook remains mild.
Stronger job growth has fueled speculation that the Fed could start reducing its purchases soon. But the economic growth remains sluggish and unemployment high at 7.6 percent.

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