The The Fed has released its quarterly economic projections. after announcing that it is raising its interest rates by 75 basis points to 1.75%, above the expected 1.5%.
The entity considers that the PCE inflation will end 2022 at 5.2%, compared to the 4.3% projected in March. It also expects to be at 2.6% in 2023, at 2.2% in 2024 and back to 2.0% in the long term.
With respect to US real GDP growth, Fed puts at 1.7% in 2022, down from 2.8% of its March forecastto then increase at a rate of 1.7% in 2023 and 1.9% in 2024, before growing at a long-term rate of 1.8%.
The Fed has also released its latest dot plot, showing where rates are expected at the end of 2022, 2023 and 2024. The average opinion of Federal Reserve members is that interest rates will end 2022 at 3.4%, which is an increase from the last dot plot in March, in which the median opinion was 1.9%. Below, rates are seen to end 2023 at 3.8%, before falling back to 3.4% at the end of 2024. The Fed’s view on long-term interest rates has been raised slightly to 2.5% since 2.4% in March.
Source: Fx Street
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