03/19/2014 02:01 EDT | Updated 05/19/2014 05:59 EDT

Federal Reserve forecasts steady growth and declining unemployment this year and next

WASHINGTON - Federal Reserve officials expect the U.S. economy to grow at a steady if modest pace in 2014 despite weather-related setbacks this winter.

The Fed forecasts growth of 2.8 per cent to 3 per cent this year, a bit lower than its December projection of between 2.8 per cent and 3.2 per cent.

The forecast suggests that Fed policymakers will continue to pare their monthly bond purchases, which are intended to stimulate growth by keeping interest rates low. The Fed's first policymaking meeting under new Chair Janet Yellen ended Wednesday.

The Fed expects unemployment to fall further this year than it thought in December. It forecasts that the unemployment rate will drop to 6.1 per cent to 6.3 per cent by the end of this year, down from its December projection of 6.3 per cent to 6.6 per cent.