Fed slashes growth forecasts

According to the Financial Times, the Fed seems to believe that despite its quantitative easing" growth will remain slow and unemployment high for the next couple of years.

When the FOMC published its last forecasts in June most members thought that 2011 growth would be between 3.5 and 4.2 per cent, but many now think growth will be between 3 and 3.5 per cent, and some expect less than that.
FOMC members have made particularly aggressive upward revisions to their unemployment forecasts, with a large number now predicting that it will still be 8 per cent or above at the end of 2012, compared to the 7.1 to 7.5 per cent that they forecast in June.
“Because I expect hiring to strengthen only gradually, the unemployment rate is likely to remain elevated for quite some time. In fact, I do not expect it to fall below 8 per cent before 2013,” Sandra Pianalto, president of the Cleveland Fed, said in a speech last week.
Some Fed officials have become concerned that workers have the wrong skills, or are trapped in the wrong places because they cannot sell their home, and will struggle to find jobs even once the economy fully recovers.
These officials may raise their forecasts of long-term unemployment by a full percentage point to more than 6 per cent – although the rules for forecasting mean they must disregard any rise that they think is due to the extension of unemployment benefits that will expire. . . .