Fed acknowledges slowdown

The economy is indeed a little worse than expected, but the central bank says the slowdown is transitory. From the statement:

The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable.

As expected, the Fed plans to keep interest rates at record lows for "an extended period." Little reaction from Wall Street. Still ahead is Fed Chairman Ben Bernanke's press conference.