In its Projections Summary, the US Federal Reserve noted that expects the Gross Domestic Product (GDP) to contract by 2.4% (median) in 2020, compared to 3.7% reported in the September post.
Besides, the Fed expects the economy to grow 4.2% and 3.2% in 2021 and 2022, respectively. Both figures show an upward revision of 0.2% compared to the September forecasts.
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The Fed sees Fed funds rate in late 2021 at 0.1%, matching the forecast made in September. This same projection of 0.1% continues to hold for 2022 and 2023.
In the long term, interest rates are seen growing at 2.5%, as previously projected.
The median forecast of Fed policy makers is that rates will remain near zero until 2023.
One Fed lawmaker sees a takeoff in the federal funds rate from zero in 2022, while five see a takeoff in 2023.
La Fed improves its prospects for the US economy, relative to GDP, unemployment and inflation. For 2020, it projects a GDP contraction of -2.4% compared to the -3.7% forecast in September. It improves its prospects by two tenths for 2021 and 2022, when GDP will grow by 4.2% and 3.2% respectively.
The entity places the unemployment rate this year at 6.7%, falling to 5% in 2021. For 2022 and 2023, unemployment will stand at 4.2% and 3.7% respectively.
On inflation, the average of the participants believe that it will reach 1.2% in 2020 and will rise to 1.8% in 2021, reaching 1.9% in 2022. In 2023 the goal of 2% will be achieved.
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