Fed Sees Growth Prospects Waning on European Debt

this was inevitable. Can you say, "double dip"? from NYT:


Federal Reserve officials may trim forecasts for U.S. economic growth when they meet next week to set interest rates as Europe’s debt crisis saps demand for American goods and roils financial markets.
Central bankers may reduce their 2010 estimates by “several tenths” of a percentage point and as much as 0.75 point for 2011, said former Fed Governor Lyle Gramley. That would mark a reversal from April, when officials raised their projections for this year to a range of 3.2 percent to 3.7 percent and left 2011 and 2012 forecasts little changed.
The new estimates are likely to reinforce the Fed’s pledge, in place since March 2009, that interest rates will stay very low for an “extended period,” said former Fed researcher John Ryding. Some Fed officials are concerned that results of stress tests planned for European banks may further shake confidence in the continent’s financial system.