In Fed’s new median economic projections, comparing to June’s projection, the outlook in 2021 looks weaker with lower GDP growth projection, and higher unemployment rate and core PCE inflation. But a stronger bounce back is projected in 2022.
Meanwhile, the median projection now shows 1 rate hike in 2022. In the dot plot, 9 members penciled in one hike or more in 2022, versus 8 members expecting no change.
GDP growth:
- 2021 downgraded from 7.0% to 5.9%
- 2022 upgraded from 3.3% to 3.8%
- 2023 upgraded from 2.4% to 2.5%
- 2024 at 2.0% (new)
Unemployment rate:
- 2021 raised from 4.5% to 4.8%
- 2022 unchanged at 3.8%
- 2023 unchanged at 3.5%
- 2024 at 3.5% (new).
Core PCE inflation:
- 2021 upgraded from 3.0% to 3.7%
- 2022 raised from 2.1% to 2.3%
- 2023 rased from 2.1% to 2.2%
- 2024 at 2.1% (new)
Federal funds rate:
- 2021 unchanged at 0.1%
- 2022 raised form 0.1% to 0.3%
- 2023 raised from 0.6% to 1.0%
