As expected, the Federal Reserve took the target range for its benchmark Fed Funds rate to 2.25 percent to 2.5 percent yesterday. The move marked the fourth increase this year and the ninth since it began raising rates in December 2015.
The Fed also lowered its outlook for the long-term rate, from 3 percent in the September forecast to 2.8 percent this month. The 2019 estimate declined to 2.9 percent from 3.1 percent, and both 2020 and 2021 dropped to 3.1 percent from 3.4 percent.
Changes to the long-term growth rate were mixed. The Fed now sees GDP as growing 3 percent for the full year of 2018, down one-tenth of a percentage point from September, and 2.3 percent for 2019, a 0.2 percent point reduction.
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