Fed acknowledges economy is growing more slowly

WASHINGTON (AP) — The Federal Reserve acknowledged today that the economy is growing more slowly than it expected.

But it said it will complete its $600 billion Treasury bond buying program by June 30 as planned and announced no further efforts to boost the economy.

Ending a two-day meeting, the Fed repeated a pledge to keep interest

rates at record lows near zero for “an extended period,” a promise

it’s made for more than two years.

Fed officials said in a statement that they think the main causes of

the economy’s slowdown, such as high gas prices and supply disruptions

from Japan’s disasters, are temporary. Once those problems subside,

Fed officials said the economy should rebound.

Still, the statement stood in contrast to the Fed’s more upbeat view

when officials last met eight weeks ago. At that time, the central

bank said the job market was gradually improving.

The new statement acknowledged the slowdown that’s occurred over the

past two months. The economy added just 54,000 jobs in May, far fewer

than in the previous two months. Consumer spending has weakened, too.

The Fed said it would keep its holdings of Treasury bonds at current

levels. That policy is intended to keep consumer and business loan

rates at low levels to stimulate spending.

Though the central bank noted that inflation has risen, it expects

those pressures to be temporary as well.

The Fed announcement had little effect on the stock and bond markets.

The Dow Jones industrial average was down slightly before and after

the Fed issued its statement at mid-day.