updated 11/20/2008 3:07:23 PM ET 2008-11-20T20:07:23

The Federal Reserve announced Thursday that it will hold a two-day meeting in December to weigh its next move on interest rates and to make a fresh assessment of the economy.

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The Fed's last meeting of the year was originally slated as a one-day session on Dec. 16. Now it will turn into a two-day meeting concluding on that day.

The change will give Fed Chairman Ben Bernanke and his colleagues "additional time for discussion," the central bank said in a brief statement.

Many economists predict the Fed will lower rates again at next month's meeting to aid the sinking economy.

The Fed on Wednesday dramatically lowered its projections for economic activity this year and next. It warned that the nation's unemployment rate — which averaged 4.6 percent last year — would rise sharply higher.

The economy has been badly hurt by a severe financial and credit crisis that has choked the free flow of credit, the oxygen for commerce. Vanishing jobs, shrinking nest eggs and falling home values have forced American consumers to cut back sharply. That jolted the economy into reverse in the summer. Many analysts believe the economy will continue to contract through the rest of this year and into 2009.

To provide some relief, the Fed on Oct. 29 lowered its key rate to 1 percent, a level seen only once before in the last half-century. Just weeks earlier — on Oct. 8_ the Fed had joined with other central banks to slash rates, the first coordinated action of its kind in the Fed's history.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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