Dollar drops broadly today even though Fed raise federal funds rate by 25bps to 1.25% to 1.50% as widely expected. Two known doves, Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans dissented.
In the updated projections, GDP forecast for 2018 is raised to 2.5%, up from 2.1%. For 2019, GDP forecast is raised to 2.1%, up from 2.0%.
Unemployment rate projections fro 2018 and 2019 are lowered to 3.9%, down from 4.1%
Inflation forecasts are kept unchanged. That is, PCE is projected to be at 1.9% at 2018 and 2.0 at 2019. Core PCE is projected to be at 1.9% in 2018 and 2.0% at 2019.
Federal funds rate projections were also kept unchanged. That is, to be at 2.1% at 2018 and 2.7% at 2019. Indeed, for 2020, rate is now projected to be at 3.1%, revised up from September’s forecast of 2.9%.
Dollar’s selloff seems to be more related to the voting, and the lack of hawkish surprises.
Updated Fed projections
