The Federal Open Market Committee announced on Wednesday it would complete purchases of $600 billion in treasury securities in June. Defending the strategy, also known as quantitative easing or QE2, Chairman Ben Bernanke said the Fed’s actions helped increase stock prices, reduce spreads in credit markets, and lower volatility.

Earlier that day, the Fed downgraded its estimate of the gross domestic product, or the total production of goods and services by the United States’ economy, for the whole of 2011.

Bernanke said he expected a relatively weak estimate for the first quarter, a little under 2 percent growth, down from 3.1 percent growth in the fourth quarter last year.

Most economists estimates were around 2 percent for the first quarter, a significant downgrade. Earlier this month, the average estimate was 2.7 percent from a survey of 56 economists conducted by the Wall Street Journal.

The Fed expected GDP to grow 3.1 to 3.3 percent for the whole of 2011, down from its January estimate of 3.4 to 3.9 percent.

Weak exports and low spending in construction and defense resulted in lower expectations this quarter, Bernanke said.

Economists were surprised by China’s high numbers in February. Imports from China were higher than expected, despite Chinese New Year falling on February 3, said economist Russell Price of Ameriprise Financial.

“We saw the [imports] spike in January and we thought that might be temporary.” Price said. “It continued into February, which was quite surprising. A lot of Chinese operations were closed that first week of February.”

Another reason for the downgraded estimates is decreased expectations in consumer spending.

“The combination of the higher oil prices and gasoline prices took a little bit off our consumer spending expectations.” Price said.

Also on Wednesday the Federal Reserve brightened its outlook on unemployment: 8.4 to 8.7 percent, down from 8.8 to 9.0 percent.

During the press conference, Bernanke was asked what the Fed could do about unemployment. While he defended QE2 earlier, he said the Fed would not pursue another round quantitative easing because of inflationary worries.

“The trade-offs are getting less attractive at this point. Inflation has gotten higher.” Bernanke said. “If we are going to have success in creating a long-run sustainable recovery with lots of job growth, we have to keep inflation under control.”