WASHINGTON — The Federal Reserve today sharply lowered its projection for economic growth this year, citing blows from the housing and credit debacles along with zooming energy prices. It also expects higher unemployment and inflation.

Even with the more downbeat outlook, Fed officials left the impression that they would not be inclined to cut interest rates further. The decision at the Fed’s last meeting on April 29-30 to reduce rates was a “close call,” according to minutes of those private deliberations released today.

The Fed hopes that its series of powerful rate cuts ordered since last September and the government’s $168 billion stimulus package of tax rebates for people and tax breaks for businesses would help energize growth somewhat in the second half of this year.

Fed officials viewed economic activity “as likely to be particularly weak in the first half of 2008; some rebound was anticipated in the second half of this year,” the documents stated.

Given the hope of a second-half economic pickup but worried about inflation, Fed officials signaled last month that their one-quarter-point rate reduction, which dropped their key rate to 2%, might be their last rate cut for some time.

“Most members viewed the decision to reduce interest rates at this meeting as a close call,” the documents revealed. “Although downside risks to growth remained, members were also concerned about the upside risks to the inflation outlook, given the continued increases in oil and commodity prices.”

Under its new economic forecast, the Fed said it now believes gross domestic product will grow between just 0.3% to 1.2% this year. That’s lower than a previous Fed forecast, released in late February, that estimated growth to be between 1.3% and 2%.

GDP is the value of all goods and services produced within America and is the best barometer of the country’s economic fitness.

With economic growth slowing, the Fed projected that the national unemployment rate will rise to between 5.5% and 5.7% this year. That is higher than the central bank’s old forecast for the rate to climb as high as 5.3%. Last year, the unemployment rate averaged 4.6%.

And, with energy prices marching upward, the Fed raised its projection for inflation. The Fed now expect inflation to be between 3.1% and 3.4% this year. That’s higher than its old forecast for inflation, which was estimated to come in at around 2.1% to 2.4%.