Fed downgrades assessment on economy
WASHINGTON- The Federal Reserve says the economy is growing modestly, considered a downgrade from its assessment in June. The Fed expects growth will pick up in the second half of the year and it will keep buying $85-billion a month in bonds to keep long-term interest rates low, in hopes of boosting the economy. It says it also plans to keep its key short-term interest rate at a record low near zero as long as the unemployment rate stays above 6.5% and the inflation outlook remains mild. The unemployment rate is 7.6% and economic growth is considered sluggish. Recent stronger job growth had analysts speculating the Fed could start reducing its bond buying soon.