The Federal Reserve released its latest macroeconomic projections along with its monetary policy announcement. Projections turned out to be more optimistic than those published in June.
-
U.S. GDP will shrink 3.7% in 2020 (vs June projection: -6.5%)
-
U.S. unemployment rate to be significantly lower at the end of the year (similarly to 2021, and 2022)
-
Higher inflation in both 2020 and 2021. Still, PCE and core PCE target should not be achieved until 2023.
-
The Fed sees rates close to zero though 2023
-
Long-term rates median remains at 2.5%
Solid macroeconomic projections, particularly for 2023. Nevertheless, most Fed members do not see any changes for higher interest rates. That is crucial for stock markets, gold and other risk assets - rates will remain near zero despite better economic outlook. Source: Fed