Wednesday, September 18, 2013

FOMC Projections and Press Conference

by Calculated Risk on 9/18/2013 02:13:00 PM

The key sentence in the announcement was: "the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases".

With the downgrade to GDP and inflation (for 2014), it makes sense that the Fed decided to wait for more data.

As far as the "Appropriate timing of policy firming", the participants moved out a little with two participants now seeing the first increase in 2016.

Bernanke press conference here or watch below. 



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On the projections, GDP was revised down for 2013 and 2014, the unemployment rate was revised down slightly, and inflation was revised down for 2014. 

GDP projections of Federal Reserve Governors and Reserve Bank presidents
Change in Real GDP12013201420152016
Sept 2013 Meeting Projections2.0 to 2.32.9 to 3.13.0 to 3.52.5 to 3.3
June 2013 Meeting Projections2.3 to 2.63.0 to 3.52.9 to 3.6
Mar 2013 Meeting Projections2.3 to 2.82.9 to 3.42.9 to 3.7
1 Projections of change in real GDP and in inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 7.3% in August. 

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents
Unemployment Rate22013201420152016
Sept 2013 Meeting Projections7.1 to 7.36.4 to 6.85.9 to 6.25.4 to 5.9
June 2013 Meeting Projections7.2 to 7.3 6.5 to 6.85.8 to 6.2
Mar 2013 Meeting Projections7.3 to 7.5 6.7 to 7.06.0 to 6.5
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

The FOMC believes inflation will stay significantly below target.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents
PCE Inflation12013201420152016
Sept 2013 Meeting Projections1.1. to 1.21.3 to 1.81.6 to 2.01.7 to 2.0
June 2013 Meeting Projections0.8 to 1.21.4 to 2.01.6 to 2.0
Mar 2013 Meeting Projections1.3 to 1.71.5 to 2.01.7 to 2.0

Here is core inflation:

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents
Core Inflation12013201420152016
Sept 2013 Meeting Projections1.2 to 1.31.5 to 1.71.7 to 2.01.9 to 2.0
June 2013 Meeting Projections1.2 to 1.31.5 to 1.81.7 to 2.0
Mar 2013 Meeting Projections1.5 to 1.61.7 to 2.01.8 to 2.0