Wednesday, December 14, 2016

FOMC Projections and Press Conference Link

by Bill McBride on 12/14/2016 02:11:00 PM

Statement here. 25 bps rate hike.

Yellen press conference video here.

On the projections, GDP was mostly unchanged.

GDP projections of Federal Reserve Governors and Reserve Bank presidents
Change in
Real GDP1
2016201720182019
Dec 2016 1.8 to 1.91.9 to 2.31.8 to 2.21.8 to 2.0
Sept 2016 1.7 to 1.91.9 to 2.21.9 to 2.21.7 to 2.0
1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.6% in November and 4.9% in October, so the unemployment rate projections were revised down slightly.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents
Unemployment
Rate2
2016201720182019
Dec 2016 4.7 to 4.84.5 to 4.64.3 to 4.74.3 to 4.8
Sept 2016 4.7 to 4.94.5 to 4.74.4 to 4.74.4 to 4.8
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of October, PCE inflation was up 1.4% from October 2015.  With oil prices up year-over-year, PCE inflation has been moving up.  So inflation was revised up for 2016, but there was little change for 2017 and 2018.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents
PCE
Inflation1
2016201720182019
Dec 2016 1.51.7 to 2.01.9 to 2.02.0 to 2.1
Sept 2016 1.2 to 1.41.7 to 1.91.8 to 2.01.9 to 2.0

PCE core inflation was up 1.7% in October year-over-year.  Core PCE inflation was unrevised for 2016.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents
Core
Inflation1
2016201720182019
Dec 2016 1.7 to 1.81.8 to 1.91.9 to 2.02.0
Sept 2016 1.6 to 1.81.7 to 1.91.9 to 2.02.0