Observers will be looking for signs of a pause in the rate hikes - possibly even in Q1 - and also for a reduction in the number of projected hikes in 2019.
Here are the September FOMC projections.
Current projections for Q4 GDP are in mid-to-high 2% range. GDP increased at a 2.2% real annual rate in Q1, 4.2% in Q2, and 3.5% in Q3. The FOMC is projecting Q4 over the previous Q41, and using the current projections for Q4, this projects to around 3.1% to 3.2% for 2018.
However, most analysts expect growth to slow more than expected in 2019, and the FOMC might revise down projections for GDP in 2019.
| GDP projections of Federal Reserve Governors and Reserve Bank presidents | |||
|---|---|---|---|
| Change in Real GDP1 | 2018 | 2019 | 2020 |
| Sep 2018 | 3.0 to 3.2 | 2.4 to 2.7 | 1.8 to 2.1 |
| Jun 2018 | 2.7 to 3.0 | 2.2 to 2.6 | 1.8 to 2.0 |
The unemployment rate was at 3.7% in November. So the unemployment rate projection for 2018 will probably be unchanged.
| Unemployment projections of Federal Reserve Governors and Reserve Bank presidents | |||
|---|---|---|---|
| Unemployment Rate2 | 2018 | 2019 | 2020 |
| Sep 2018 | 3.7 | 3.4 to 3.6 | 3.4 to 3.8 |
| Jun 2018 | 3.6 to 3.7 | 3.4 to 3.5 | 3.4 to 3.7 |
As of October, PCE inflation was up 2.0% from October 2017. This is at the bottom of the projected range.
| Inflation projections of Federal Reserve Governors and Reserve Bank presidents | |||
|---|---|---|---|
| PCE Inflation1 | 2018 | 2019 | 2020 |
| Sep 2018 | 2.0 to 2.1 | 2.0 to 2.1 | 2.1 to 2.2 |
| Jun 2018 | 2.0 to 2.1 | 2.0 to 2.2 | 2.1 to 2.2 |
PCE core inflation was up 1.8% in October year-over-year. Core PCE inflation might be revised down for 2018.
| Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents | |||
|---|---|---|---|
| Core Inflation1 | 2018 | 2019 | 2020 |
| Sep 2018 | 1.9 to 2.0 | 2.0 to 2.1 | 2.1 to 2.2 |
| Jun 2018 | 1.9 to 2.0 | 2.0 to 2.2 | 2.1 to 2.2 |
In general the data has been close, but somewhat softer, than the FOMC's September projections.