Thursday, September 22, 2016

The Interest Rate Outlook

One of the key releases after each Federal Reserve meeting is the so-called dot plot, where committee members use dots to suggest where they see rates heading in the months and years to come. Following today's meeting, the median of the dots at the end of the year is now 0.6 percent, suggesting just one rate increase this year, which would come after the December meeting.

But the spread of opinions is unusually broad. Three officials see no increases this year, while four members expect more than one increase to be appropriate. Looking ahead, policy-makers see two increases in 2017, and three each in 2018 and 2019. The longer-term rate beyond 2019 is forecast to be at 2.9 percent, down from 3 percent in June.

The summary of economic projections also suggested slightly lower expectations for inflation this year, 1.3 percent now versus 1.4 percent in June. The outlook for economic growth also dropped some, sitting at 1.8 percent now versus 2 percent in June.

No comments:

Post a Comment