NEW YORK (CNNMoney) — The Federal Reserve believes the economy is improving, but not enough to warrant a change in its stimulative policies just yet.
The 17 members of the Federal Open Market Committee revised their economic forecasts Wednesday, predicting the unemployment rate will fall to between 7.8% and 8% by the end of the year.
That’s slightly lower than the Fed had previously anticipated, but not far off from the current 8.2% unemployment rate.
Meanwhile, the Fed expects the economy to grow between 2.4% and 2.9% in 2012, which would be an improvement over 1.7% growth last year.
“The Committee expects economic growth to remain moderate over coming quarters and then to pick up gradually,” the official statement said.
Despite the improving outlook, Fed officials still believe the economy will remain weak enough to warrant ultra-low interest rates “at least through late 2014.” The Fed has kept interest rates near zero since December 2008, hoping cheaper access to credit will spur economic growth.
Richmond Fed President Jeffrey Lacker dissented against that language, as he did in the last two meetings. He believes the economy will not need ultra-low interest rates as far out as late 2014. All nine of the Fed’s other voting members voted in favor of the statement.
Meanwhile, the program known as Operation Twist remains in place, shifting $400 billion from short-term to long-term bonds. The hope is that this program, which is scheduled to end in June, will bring down long-term interest rates on items like car loans and mortgages.
The central bank noted “strains in global financial markets continue to pose significant downside risks,” oil and gasoline prices may push inflation higher temporarily, and the housing market is still in the slumps.
At 2:15 p.m. ET, Federal Reserve Chairman Ben Bernanke will answer reporters’ questions at a press conference.