PREDICTS GROWTH `MUCH WEAKER' COMPARED TO JANUARY ESTIMATE

RAISES CORE INFLATION FORECASTS TO 2.2%-2.4%, FROM 2%-2.2%

POLICY MAKERS EXPECT GROWTH `REBOUND' IN 2008 SECOND HALF

SAYS MOST MEMBERS VIEWED GROWTH RISK STILL TO `DOWNSIDE'

SAYS `MANY' OFFICIALS SAW GDP CONTRACTION IN FIRST HALF

SAW RISING RESTRAINT ON SPENDING FROM WEAKENING JOB MARKET