Wednesday, June 19, 2019

FOMC Projections and Press Conference

by Calculated Risk on 6/19/2019 02:08:00 PM

Statement here.

Fed Chair Powell press conference video here starting at 2:30 PM ET.

On the projections, growth was revised down, the unemployment rate revised up slightly, and inflation was softer.

Q1 real GDP growth was at 3.1% annualized, and most analysts are projecting around 2% in Q2.  So the GDP projections were revised up slightly.

GDP projections of Federal Reserve Governors and Reserve Bank presidents
Change in
Real GDP1
201920202021
Jun 20192.0 to 2.21.8 to 2.01.8 to 2.0
Mar 20191.9 to 2.21.8 to 2.01.7 to 2.0
Dec 20182.3 to 2.51.8 to 2.01.5 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 3.6% in May. The unemployment rate projection for 2019 was revised down slightly.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents
Unemployment
Rate2
201920202021
Jun 20193.6 to 3.73.6 to 3.93.7 to 4.1
Mar 20193.6 to 3.83.5 to 3.93.6 to 4.0
Dec 20183.5 to 3.73.5 to 3.83.6 to 3.9
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of April 2019, PCE inflation was up 1.5% from April 2018. So PCE inflation projections were revised down for 2019 and 2020.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents
PCE
Inflation1
201920202021
Jun 20191.5 to 1.61.9 to 2.02.0 to 2.1
Mar 20191.8 to 1.92.0 to 2.12.0 to 2.1
Dec 20181.8 to 2.12.0 to 2.12.0 to 2.1

PCE core inflation was up 1.6% in April year-over-year. So Core PCE inflation was revised down for 2019 and slightly for 2020.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents
Core
Inflation1
201920202021
Jun 20191.7 to 1.81.9 to 2.02.0 to 2.1
Mar 20191.9 to 2.02.0 to 2.12.0 to 2.1
Dec 20182.0 to 2.12.0 to 2.12.0 to 2.1