Expansion, but “frustratingly slow expansion” in the next two years.  So says the Federal Reserve in deciding to put off any new action to spur the economy.

Fed Chairman Ben Bernanke ackowledged Wednesday economic growth will be slow…1.7 percent for the rest of this year and 2.5 to 2.9 percent in 2012. Both forecasts are roughly a full percentage point lower than the Fed’s projections from June.

The unemployment rate has been stuck near 9 percent for more than two years. The Fed doesn’t see that changing this year. It predicts it will fall between 8.5 percent and 8.7 percent next year. In June, the Fed had predicted unemployment would drop next year to as low as 7.8 percent.

The new forecast takes into account the substantial slowdown in growth that occurred earlier this year.

On inflation, the Fed expects consumer prices will increase no more than 2.9 percent this year — slightly worse than June’s forecast. That’s largely because of a spike in food and gas prices that occurred earlier this year. The Fed noted the improved economic picture in its policy statement issued after its two-day meeting.

As a result, it said it would hold off on any new actions because stronger growth is giving it time to gauge the impact of steps it’s already taken.

Rutgers/Camden economist Mitchell Koza says the Federal Reserve is basically saying they think the economy is moving in the right direction, and at this point they do not believe that greater intervention or change will have a signifigant impact.

Koza says one of the factors influencing the fed is the financial problems in Greece and Europe. He says the U-S economy is not immune to those problems because we are part of a global economy that has a high degree of interdependency.