After leaving interest rates unchanged at 0.25%, as expected, the Monetary Policy Committee of the Federal Reserve has published its economic projections for the American economy.
Fed policy makers they continue to see no rate hikes until 2023. The Fed’s view of the fed funds rate at the end of 2023 is 0.1% (matching the previous forecast).
The average opinion on long-term interest rates is 2.5%, also coinciding with the previous estimate.
Nevertheless, Notably, the US Federal Reserve Summary of Projections on Wednesday showed that four lawmakers see a takeoff in the federal funds rate from zero in 2022, compared to just one in the December release.. In addition, the number of Committee members who see a takeoff in the federal funds rate from zero in 2023 increased to seven from five from December.
La Fed forecasts US GDP growth of 6.5% in 2021, which represents an upward revision from the previous 4.2%. For 2022, a rise of 3.3% is expected and for 2023 of 2.2% in 2023. The average of the long-term forecast is 1.8% (matching the previous forecast).
The Federal Reserve anticipates a Unemployment rate for the end of the year in the United States of 4.5% in 2021, 3.9% in 2022, and 3.5% in 2023. The average of the long-term forecast is 4.0% (compared to the previous 4.1%).
The Fed anticipates a inflation of personal consumption expenditure (PCE) of 2.4% in 2021, from 2.0% in 2022 and 2.1% in 2023.
Most Fed policymakers see the risks to inflation weighted upward forecasts, compared to the majority who see the downside risk in December.
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