Contrary to what you might be reading or hearing, the Federal Reserve has by no means exhausted all of its tools to accelerate growth in the U.S. economy.

And contrary to what you might be reading or hearing, the Fed’s actions over the last few years have not damaged the economy. We have not seen runaway inflation: in fact, we still need higher inflation. We have not seen investors run away from U.S. debt: the dollar is still — even increasingly — regarded as one of the world’s few safe havens.

And by not using all the tools in its toolbox, the Fed is virtually assuring that the American economy will remain weak for years, probably until the end of this decade.

For a broader but still concise summary of the Fed’s actions over the last few years, check out an April column by my Armstrong colleague Nicholas Mangee: What the Federal Reserve has (has not) done

Today’s economic projections after the latest round of Fed meetings are, in a word, dismal. They show continued growth and continued declines in unemployment — i.e., no recession — but with a growth so slow that millions of Americans will remain un- or underemployed. Many Americans already have a tenuous hold on their standing in the middle class; millions more will fall out of it if the Fed doesn’t do more.

Here are the projections in graph form that the Fed released today. There’s obviously a considerable range of uncertainty in these forecasts, in part because of the potential catastrophe in Europe and other external events, but note that the best case scenarios are weak. To a large extent, these weak forecasts are still rooted in the housing crisis, which I last discussed at length here.

From the Fed:

And those projections in table form:

So absent Fed action, the best estimates right now are for GDP growth to remain below 3% into 2014 and for the unemployment rate to stay above 7% into 2015.

The Federal Reserve has a dual mandate: to control inflation and to maximize employment. Both those goals are currently significantly below the Fed’s targets.

Check out Calculated Risk for a broader discussion and additional links. He expects QE3 to be announced on August 1.