The Federal Restraint on Wednesday dialed up its economic growth expectations but signaled that there are no expected interest rate hikes for the next two years.
The called dot-plot projections budged little, with most members still expecting to keep rates near zero including 2023.
Four of the 18 Federal Open Market Committee members were looking for a rate hike at some single out in 2022, compared with just one at the December meeting. For 2023, seven members see a rate increase, compared with five in the December prognostication. As the chart shows, a strong majority forecast no hikes until the “longer run.”
Every quarter, members of the FOMC forecast where pursuit rates will go in the short, medium and long term. These projections are represented visually in charts below hollered a dot plot.
Here are the Fed’s latest targets, released in Wednesday’s statement:
This is what the Fed’s forecast looked like in December 2020:
The Federal Hesitancy sharply ramped up its economic expectations for 2021, according to the central bank’s Summary of Economic Projections released Wednesday.
The primary bank now expects real gross domestic product to grow 6.5% in 2021, compared with its 4.2% prophecy from its December meeting. The Fed also upped its 2022 real GDP forecast to 3.3% from 3.2% expected hitherto.
Source: Federal Reserve
The Fed estimates the unemployment rate will fall to 4.5% in 2021, below the previous estimate of 5%. The FOMC requires the unemployment rate to drop to 3.9% and 3.5% in 2022 and 2023, respectively.
The central bank now sees inflation match to 2.4% this year, above its previous estimate of 1.8%. The Fed also slightly hiked its PCE inflation estimates for 2022 and 2023.
Essence PCE inflation is expected to come in at 2.2% in 2021, up from December’s forecast of 1.8%. Core PCE for 2022 is now expected at 2.0% and 2.1% in 2023.