On Wednesday, the Federal Reserve announced a 50 basis-point rate hike, which came in as expected. The policy-making committee also expects more interest rate hikes going forward. In addition, the central bank also released its summary of economic projections.
In September, the Federal Reserve had projected Fed Funds rates of 4.6% and 3.9% for 2023 and 2024, respectively. However, the updated projection now stands at 5.1% and 4.1%, respectively. Moreover, its real GDP forecast for 2023 fell to 0.5%, compared to its September expectation of 1.2%.
Furthermore, PCE inflation is now expected to be 3.1% in 2023. For reference, the previous forecast was 2.8%.
