Federal Reserve raises growth forecasts for 2012

The Federal Reserve's interest rate setters have raised their forecasts for US economic growth in 2012.

They are predicting growth of between 2.4% and 2.9%, up from their 2.2% to 2.7% projection in January.

They have also lowered their forecast for the unemployment rate to between 7.8% and 8.0% from a range of 8.2% to 8.5% in January.

But they left interest rates unchanged and said they do not expect a rate rise until late 2014.

Seven of the committee members expect to raise rates in 2014 - up from five in January - while none of them expects the first increase to be any later than 2015.

At a news conference, Federal Reserve chairman Ben Bernanke said: "Most committee participants expect economic growth to remain moderate over the coming quarters and then to pick up gradually.

"Among other factors, and notwithstanding some signs of improvement, the ongoing weakness of the housing sector still represents a headwind for recovery.

"Strains in global financial markets, though less pronounced generally than last fall, continue to pose significant risks to outlook."