WASHINGTON – The Federal Reserve acknowledged Wednesday 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.

But at a news conference after the statement was released, Federal Reserve Chairman Ben Bernanke acknowledged that some of the problems slowing the economy could persist into next year.

“Maybe some of the headwinds that are concerning us, like weakness in the financial sector, problems in the housing sector … may be stronger and more persistent that we thought,” Bernanke said.

Stocks, which had been mixed most of the day, began to slide around 2:30 p.m. That was when Bernanke acknowledged that some of the problems affecting the economy may go beyond temporary factors.

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The Dow Jones industrial average closed down 80 points. All of losses occurred in the final 90 minutes of trading.

The Fed also offered its latest forecast for the economy Wednesday. It predicts the economy will grow between 2.7 percent and 2.9 percent this year. That’s down from its April estimate of between 3.1 percent and 3.3 percent.

Growth at the rate the Fed is projecting won’t be enough to significantly lower unemployment, now at 9.1 percent. The Fed estimates that unemployment will still be around 8.6 percent to 8.9 percent by the end of the year.

Unemployment near 9 percent — less than a year before the 2012 election — would dampen President Obama’s re-election hopes. An Associated Press-GfK poll released Wednesday said nearly 60 percent of Americans disapproved of his handling of the economy in general and unemployment in particular. It’s the worst such reading for Obama since he took office.

 


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