Fed cuts growth rate forecast for 2011, 2012 (by Steve Goldstein)

WASHINGTON (MarketWatch) -- The Federal Reserve cut its economic growth forecast for the second time this year, reducing its estimate of 2011 gross domestic product growth to a range of 2.7% to 2.9%, down from 3.1% to 3.3% in April and 3.4% to 3.9% in January. It's also cut its 2012 forecast from this lower base, to a level showing 3.3% to 3.7% growth from the 3.5% to 4.2% growth that the Fed forecast in April. The Fed is expecting core inflation between 1.5% to 1.8% this year, up from 1.3% to 1.6% previously, and for the price index for personal consumption expenditures to climb between 2.3% and 2.5%, vs. the April projection of 2.1% to 2.8%. It's also more worried about unemployment, forecasting the 2011 jobless rate between 8.6% and 8.9% vs. April's estimate of 8.4% to 8.7% unemployment rate.