Fed sees no economic recovery this year

The Federal Reserve no longer sees signs of recovery this year from a prolonged recession and only weak growth in 2010, minutes of a policy-setting meeting said Wednesday.Despite massive interventions by the Fed and other government bodies to jumpstart the moribund economy and unblock tight credit, policymakers at a March meeting viewed grimmer projections than those made two months earlier. The United States, among the earliest to enter recession after financial turmoil stemming from a home mortgage meltdown, could begin to grow again "slowly" next year despite numerous constraints, according to Fed projections.

"Real GDP (is) expected to flatten out gradually over the second half of this year and then to expand slowly next year," the minutes of the Federal Open Market Committee (FOMC)'s March 17-18 meeting said. The central bank anticipated the recovery "as the stresses in financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end." The United States plunged into recession in December 2007 after a home mortgage meltdown triggered a financial crisis that spread around the world, slashing economic growth.FOMC chairman Ben Bernanke and his policymakers at the March meeting stared down grim staff-prepared forecasts that were sharply lower than the outlook prepared for the January FOMC meeting.

In January, the economy was expected to recover "gradually" during the second half of 2009 albeit shrinking between 0.5 percent and 1.3 percent for the full year.