WASHINGTON, Nov. 20 (Xinhua) -- The U.S. Federal Reserve slashed on Tuesday its forecast for the U.S. economic growth to a range of 1.8 to 2.5 percent in 2008 from the 2.5 to 2.75 percent pace it forecast previously.

    "These revisions to the 2008 outlook since June stemmed from a number of factors, including the tightened terms and reduced availability of subprime and jumbo mortgages, weaker-than-expected housing data, and rising oil prices," the central bank said in its first quarterly economic forecast report under a new policy.

    The Fed also forecast that the unemployment rate would rise to between 4.8 percent and 4.9 percent next year, compared to the previously estimated 4.75 percent for 2008.

    In the past two months, U.S. unemployment rate stood at 4.7 percent, a level still considered low by historical standards. Before September, the jobless rate had remained in a range of 4.4 percent to 4.6 percent since the same month of 2006.

    With economic growth slowing, the unemployment rate would increase "modestly" next year, stabilize in 2009 and then decline slightly in 2010, the Fed said.

    Meanwhile, the Fed cut its expectation for core inflation, which excludes volatile energy and food, to 1.7 to 1.9 percent for2008, down from 1.75 to 2.0 percent it estimated previously.

    Overall inflation, including energy and food, is expected to be1.8 to 2.1 percent next year and moderate further in 2009 and 2010.

    "Overall inflation was expected to edge down over the next few years, fostered by an assumed flattening of energy prices," the Fed said.

    The report also included the Fed's forecasts through 2010, saying that the economic growth rate would be in a range of 2.3 to2.7 percent in 2009 and pick up to between 2.5 to 2.6 percent in 2010.

    The assessment of future U.S. economic performance was released a few days after Fed Chairman Ben Bernanke pledged to improve communication with the public, bring more openness to the central bank.

    Last week, Bernanke announced that the Fed would issue its economic forecasts four times each year, rather than the current twice a year, to "provide more-timely projections about the evolving outlook."

    Improving the public's understanding of the Fed's objectives and strategies reduces uncertainty, allowing businesses and people to make more informed financial decisions, Bernanke explained.