Fed: Unemployment to Stay High

In a groundbreaking news conference—the bank’s first in its 97 years—Federal Reserve Chairman Ben Bernanke said that the Fed would continue its stimulus policy because it is seeing slower growth in the economy with only a slight rise in inflation. He announced that the Fed has lowered its growth estimate for 2011 to between 3.1 percent and 3.3 percent from a previous forecast of 3.4 percent to 3.9 percent. The Fed has raised its estimate of inflation this year to between 2.1 percent and 2.8 percent because of a spike in oil prices. Bernanke also delivered some discouraging news regarding employment: He said he expects the jobless rate to hover between 8.4 and 8.7 percent in 2011.