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Fed cuts 2012 growth forecast, raises next 2 years

WASHINGTON (AP) — The Federal Reserve has lowered its outlook for growth this year but is more optimistic about the next two years. The change likely reflects a series of both stimulus measures the Fed launched Thursday aimed at boosting the sluggish economy.

The Fed now expects growth to be no stronger than 2 percent this year, down from the 2.4 percent forecast in June. The Fed expects growth to accelerate next year as much as 3 percent, up from June’s forecast of as much as 2.8 percent. For 2014, the Fed projected growth between 3 percent and 3.8 percent.

The Fed still thinks unemployment won’t fall below 8 percent this year. The unemployment rate is currently at 8.1 percent. It says it could be as low as 7.6 percent next year, and down to 6.7 percent in 2014.

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