The following details the Federal Reserve's three year forecasts for growth, unemployment, inflation, and interest rates, after members of the Federal Open Market Committee increased overnight interest rates by 25 basis points to between 0.75% and one percent today for the second time in three months, while Fed Chair Yellen talked about the decision in a post-meeting press conference.
Growth rates are expected to range from 2.0% and 2.2% in 2017, compared to 1.9% to 2.3% in previous forecasts in the December meeting, while in 2018, the bank forecasts a growth of 1.8% to 2.3%, compared to 1.8% to 2.2% previously, while expecting growth of 1.8% to 2.0 in 2019, same as before, and finally, long-term growth is forecast to range from 1.8% to 2.0%, same as before as well.
Unemployment rates for 2017 are expected to range between 4.5% and 4.6%, same as previous forecasts, while rates for 2018 are forecast to range from 4.3% to 4.6%, compared to 4.3% to 4.7% before. For 2019, forecasts point to 4.3% to 4.7%, compared to 4.3% to 4.8% before, while ranging from 4.7% to 5.0% in the long term, same as previously.
As of 07:09 GMT, the dollar index, tracking the greenback against a basket of currencies, fell to 101.52 from the opening of 100.69, with an intraday low at 101.41, and a high at 100.71.
Inflation in 2017 is expected to range from 1.8% to 2.0%, compared to 1.7% to 2.0% in previous forecasts, while ranging from 1.9% to 2.0% in 2018, same as before. In 2019, inflation is forecast to range from 2.0% to 2.1%, while settling at 2.0% in the long term, also the same as before.
Core inflation in 2017 is forecast to range from 1.8% to 1.9%, same as previous forecasts, while ranging from 1.9% to 2.0% in 2018, same as before, and moving between 2.0% and 2.1% in 2019, compared to 2.0% in previous forecasts.
Finally, the FOMC expects overnight interest rates to range between 1.4% and 1.6% this year, compared to 1.1% to 1.6% in previous forecasts, while ranging from 2.1% to 2.9% in 2018, compared to 1.9% to 2.6% previously, and finally, rates are expected to range between 2.6% and 3.3% in 2019, compared to 2.4% to 3.3% before.