Wednesday, September 18, 2019

FOMC Projections and Press Conference

by Calculated Risk on 9/18/2019 02:12:00 PM

Statement here.

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

On the projections, growth was revised up slightly, and other projections were mostly unchanged.

Q1 real GDP growth was at 3.1% annualized, and Q2 at 2.0%.   Currently most analysts are projecting around 1.5% to 2% in Q3. So the GDP projections for 2019 were revised up slightly.

GDP projections of Federal Reserve Governors and Reserve Bank presidents
Change in
Real GDP1
201920202021
Sept 20192.1 to 2.31.8 to 2.11.8 to 2.0
Jun 20192.0 to 2.21.8 to 2.21.8 to 2.0
Mar 20191.9 to 2.21.8 to 2.01.7 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 3.7% in August.  So the unemployment rate projection for 2019 was unchanged.

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

As of July 2019, PCE inflation was up 1.4% from July 2018 So PCE inflation projections were unchanged.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents
PCE
Inflation1
201920202021
Sept 20191.5 to 1.61.9 to 2.02.0 
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

PCE core inflation was up 1.6% in July year-over-year. So Core PCE inflation was unchanged.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents
Core
Inflation1
201920202021
Sept 20191.7 to 1.81.9 to 2.02.0
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