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Fed doesn't see jobless rate below 6.5% until 2015 *PIC*

Fed doesn't see jobless rate below 6.5% until 2015 (by Steve Goldstein)

WASHINGTON (MarketWatch) -- The Federal Reserve doesn't expect to hit its just-established unemployment threshold for hiking interest rates until 2015, according to a summary of the central bank's latest projections. The Fed sees the jobless rate falling to a range between 6% and 6.6% by 2015, compared to 7.7% in November. The Fed earlier Wednesday said it would keep interest rates at ultra-low levels so long as the jobless rate was above 6.5%, unless inflation got in the way. Crucially, the Fed doesn't see inflation hitting its forward-looking upper 2.5% threshold at all, with the highest rate between 1.7% to 2% not until 2015. The inflation guidance for 2013, 2014 and 2015 all were lowered, with next year's projected year-on-year rise in an inflation measure called the PCE price index seen between 1.3% and 2%, down from September's forecast between 1.6% to 2%. The Fed also modestly lowered GDP forecasts for 2012 through 2015, though the central bank still is forecasting growth north of 3% in both 2014 and 2015.

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Fed to Buy More Bonds as it Sets Jobless Target ** *PIC*
Fed doesn't see jobless rate below 6.5% until 2015 *PIC*