Chairman Ben Bernanke issued a series of warnings about the state of the US economy as he said growth is more likely to be between 2.7% and 2.9%, instead of the 3.1%-3.3% predicted in April.
Higher energy prices have been impacting consumption but he believes this should moderate in due course, the BBC reported.
Problems in the financial and property markets have been more difficult than anticipated, holding back the economy, and are likely to persist for longer.
Weak manufacturing figures, impacted by the Japanese earthquake and tsunami, have also played a part in the cuts in estimates.
As a result of the economic woes, Bernanke warned unemployment is likely to remain stubbornly high at above 8% for the remainder of 2011.
The new growth forecasts come as the Fed confirmed its second round of quantitative easing will end this month, and as it pledged to keep interest rates at between 0% and 0.25% for an extended period.
