WASHINGTON, Aug. 23 ?The financial turmoil that began with the seemingly narrow meltdown in subprime mortgages is now forcing both policy makers and Wall Street analysts to scale back their expectations for growth in the overall economy.

Most economists still predict continued economic growth for the rest of the year and into 2008, but many are trimming their forecasts and warning that even their somewhat darker views could be too rosy.

Global Insight, a forecasting firm in Lexington, Mass., on Thursday predicted that growth would be markedly slower for the third quarter of this year, and it reduced its forecast for all of 2007 to 1.9 percent from 2.1 percent.

揟he economic outlook has dimmed,?wrote Nigel Gault, group managing director of North American economic research at Global Insight. Citing tightening credit and a 揷ontinuing drumbeat of bad news on housing? as well as high oil prices and slower growth in productivity, he also scaled back his forecast for growth in 2008.

In Washington, the nonpartisan Congressional Budget Office issued a comparatively optimistic forecast on Thursday, cautiously predicting that the turmoil in markets would not derail economic growth. Even so, the Congressional agency trimmed its previous forecast for growth this year to 2.1 percent, from 2.3 percent, and it warned the uncertainties were higher than normal.

揑 wouldn抰 say we抮e sanguine,?Peter R. Orszag, director of the agency, said in an interview. 揟he situation is very cloudy and uncertain. But the most likely economic scenario is continued solid growth.?

As for the federal budget, the agency predicted the deficit would decline this year to $158 billion, its lowest level since 2002. But it reiterated past warnings that the long-term budget path is 搖nsustainable.?

If President Bush抯 tax cuts are extended indefinitely beyond their planned expiration in 2010, and Congress continues to protect most taxpayers against increases in the alternative minimum tax, the budget office estimated, over the next 10 years government revenue would fall $3.4 trillion short of the baseline forecast and deficits would return to more than $200 billion a year.

The White House put out a statement after the budget office released its new estimates celebrating the decline in the budget deficit. 揑t shows that our government is on a path to meeting the goal I set forth of putting the budget into surplus by 2012,?Mr. Bush said. 揃alancing the budget requires keeping the economy strong, keeping tax rates low, and keeping spending in check.?/p>

The Congressional Budget Office forecast was notably sunnier than those elsewhere.

揟his is one of the greatest panics I抳e seen in 55 years in financial services,?Angelo R. Mozilo, chief executive of Countrywide Financial, the nation抯 biggest mortgage lender, said in an interview on CNBC.

He predicted that the housing crisis would lead to a recession. 揑 just don抰 see a light here at the moment,?he told CNBC. 揑 can抰 believe when you抮e having this level of delinquencies ?equity is gone, the tide has gone out ?that this doesn抰 have material effect on the psyche of the American people and eventually on their wallets.?/p>

Most Wall Street forecasters are not anywhere near being that gloomy, cautioning against panic. But they are less optimistic than the Congressional forecasters.

On Wednesday, Citigroup issued a new forecast suggesting growth would fall short of its earlier estimates. And economists at Goldman Sachs, who had already reduced their forecast to 1.9 percent two weeks ago, warned on Thursday that the housing market was probably overpriced by more than 15 percent.

Where the budget office predicted on Thursday that the economy would pick up speed early next year and expand by 2.9 percent during 2008, many private sector analysts said they see growth of less than 2.5 percent next year, with some going lower.

揑 would trim back my forecast to 2 percent at best for next year, maybe 1.9 percent,?said Stuart Hoffman, chief economist at PNC Financial in Pittsburgh. 揑抎 still call this a soft landing, but we抮e barely above the treetops.?

Before the financial downturn, the Federal Reserve had been carefully trying to engineer a so-called soft landing for the economy, in which growth would slow enough to reduce inflationary pressures without greatly increasing joblessness.

Economic growth has in fact slowed this year, with unemployment still low at 4.6 percent.

Ben S. Bernanke, the Fed chairman, told Congress in July that the economy seemed poised for 搈oderate?growth of about 2.5 percent this year and a slightly faster expansion in 2008. Despite the steep downturn in residential home construction, Mr. Bernanke predicted, rising employment and wages would lead to continued growth in consumer spending and rising exports would stoke more business investment.

Lewis Alexander, chief economist at Citigroup, cautioned against 揼oing overboard?about the fallout from the housing market, noting that corporations were still fairly flush with cash and have strong balance sheets that should enable them to keep investing.

But in trimming back its growth forecast for the United States as well as Europe and Japan, Citigroup warned that the turmoil in credit markets had greatly increased the uncertainty of any predictions. 揙ngoing dislocation in money markets has the potential to impair economic activity and any forecast of solid expansion is dependent upon a timely restoration of normal money market conditions,?Citigroup抯 economists said.

And even after markets stabilize, they said, investors will demand greater premiums for taking on the added risks of commercial loans and mortgages.