June 20, 2011 7:36 AM EDT
A big week for the US economy, or rather a week when the current gloomy sentiment about the outlook for the US economy will be further tested.
The Fed is expected to cut its outlook for the economy and its growth forecasts midweek, while chairman Ben Bernanke will speak at his second press conference after the meeting ends early Wednesday morning.
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Then on Friday the third estimate of first quarter economic growth will be released. That might see a small increase, to 1.9% annual for GDP, from 1.8%, which will be hardly convincing.
The Fed's view from its April forecasts was that the US economy will grow between 3.1% and 3.3%.
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Marketwatch points out that is higher than all 51 economists polled in the early June edition of Blue Chip Economic Indicators, where the average growth rate was projected at 2.6%.
On Friday night, the International Monetary Fund cut its forecast for US growth in 2011 for the second time in two months.
In an update of its April World Economic Outlook, the Fund said it now saw the US economy growing by 2.5% this year, down from 2.8% projected in April.
The IMF forecast for 2.7% growth in 2012 was lower than the previous estimate of 2.9%
In a separate report, the IMF narrowed its deficit forecast for the US this year to 9.9% of gross domestic product, from an April estimate of 10.8%, thanks to faster growth in tax revenues and lower Federal spending.
That's a small bit of good news.
The bad news is that the IMF sees little chance of a sharp rise in growth for at least the next 18 months to two years, which means there won't be any significant improvement in the most pressing of all America's problems, the high level of unemployment.
In many ways the Fed's forecasts for unemployment this week will be more important than the estimates for further growth and inflation.
The Fed predicted an unemployment rate between 8.4% and 8.7% by the end of the year, compared to the 9.1% reported in the May jobs report earlier this month.
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