In the new economic projections (median), Fed expects GDP to contract -6.5% in 2020, then rebound by 5.0% in 2021, below slowing to 3.5% in 2022. Unemployment rate is expected to hit 9.3% by the end the of year, then dropped back to 6.5% at 2021 end, and 5.5% in 2022 end. Core PCE inflation is projected to be at 1.0% by 2020 year end, then gradually climb back to 1.5% in 2021 end, and 1.7% in 2022 end. Federal funds rates are expected to stay at 0.1%, i.e. the current target range, throughout projection horizon till 2022.
As for the dot plot, the vast majority of policymakers expected interest rate to stay at 0.00-0.25% till end of 2022. Only two members expected a hike in 2022, one to 0.25-0.50%, and another to 1.00-1.25%.
