The new economic projections were largely unchanged, except for federal funds rate. The median projections of federal funds rate are at 1.9% in 2019 and 2020, then rises to 2.1% in 2021. Just based on this median figure, with federal funds rate at 1.75-2.00%, Fed is already done with it’s “mid-cycle” adjustments.

However, based on the dot plot, it’s not totally certain and here is still risk of further rate cut this year. 7 members have penciled in another cut to 1.50-1.75% this year. 10 members have penciled in rate between 1.75 and 2.25%. Some of the “hawks” might could switch if outlook worsens.

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GDP projections (median):

  • 2019, up from 2.1% to 2.2%.
  • 2020, unchanged at 2.0%.
  • 2021, up from 1.8 % to 1.9%.

Unemployment rate projections (median):

  • 2019, up from 3.6% to 3.7%.
  • 2020, unchanged at 3.7%.
  • 2021, unchanged at 3.8%.

Core PCE projections (median):

  • 2019: unchanged at 1.8%.
  • 2020: unchanged at 1.9%.
  • 2020: unchanged at 2.0%.

Federal funds rate (median):

  • 2019, down from 2.4% to 1.9%.
  • 2020, down from 2.1% to 1.9%.
  • 2021, down from 2.1% to 2.4%.
  • 2020, 2.4% (new).

Full projections here.

 

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