Federal Reserve officials must choose this week between theirbest estimates and their worst fears of what will happen to theU.S. economy.

Policy makers will bring new forecasts to their June 19-20meeting and probably will mark down their April central-tendencyestimate for growth of 2.4 percent to 2.9 percent this year.Lurking in the background is the risk of increasing financialstress in Europe and stubbornly high U.S. unemployment that hasremained above 8 percent for 40 consecutive months.

All this could prompt them to move away from their outlook formoderate growth and tilt toward a “risk-management” strategypioneered by former Fed Chairman Alan Greenspan, which puts moreemphasis on tracking and containing high-cost threats. Both JanetYellen, the Fed's vice chairman, and William C. Dudley, head of theFederal Reserve Bank of New York, used the phrase in the pastmonth.

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