It predicted a range of 9.8-10.1 percent in 2009, up from its April forecast of 9.2-9.6 percent.

The US is mired in its worst recession since the Great Depression of the 1930s. The unemployment rate is currently at 9.6 percent, its highest level in more than a quarter century.

The forecast was part of the minutes released from the central bank's last board meeting in June. The Fed chose to keep interest rates steady at their record low of 0 percent, part of a series of drastic efforts to help nudge the US economy back into growth.

The Fed also slightly raised its forecasts for the coming years, predicting growth of between 2.1 percent and 3.3 percent in 2010 and between 3.8 percent and 4.6 percent in 2011.

But unemployment could take as long as five or six years to get back to its 'long-run' average of about 5 percent, the Fed said.