Wednesday, December 11, 2019

FOMC Projections and Press Conference

by Calculated Risk on 12/11/2019 02:10:00 PM

Statement here.

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

On the projections, growth was mostly unchanged, and unemployment and inflation were revised down slightly.

Q1 real GDP growth was at 3.1% annualized, Q2 at 2.0% and Q3 at 2.1%. Currently most analysts are projecting around 1% to 2% in Q4. So the GDP projections were little changed, although GDP for 2020 was revised up slightly.

GDP projections of Federal Reserve Governors and Reserve Bank presidents
Change in
Real GDP1
2019202020212022
Dec 20192.1 to 2.22.0 to 2.21.8 to 2.01.8 to 2.0
Sept 20192.1 to 2.31.8 to 2.11.8 to 2.0NA
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 3.5% in November.  So the unemployment rate projection for Q4 2019 was revised down slightly.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents
Unemployment
Rate2
2019202020212022
Dec 20193.5 to 3.63.5 to 3.73.5 to 3.93.5 to 4.0
Sept 20193.6 to 3.73.6 to 3.83.6 to 3.9NA
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of October 2019, PCE inflation was up 1.3% from October 2018 So PCE inflation projections were revised down slightly.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents
PCE
Inflation1
2019202020212022
Dec 20191.4 to 1.51.8 to 1.92.0 to 2.12.0 to 2.2
Sept 20191.5 to 1.61.9 to 2.02.0 NA

PCE core inflation was up 1.6% in October year-over-year. So Core PCE inflation was revised down sligthly.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents
Core
Inflation1
2019202020212022
Dec 20191.6 to 1.71.9 to 2.02.0 to 2.12.0 to 2.2
Sept 20191.7 to 1.81.9 to 2.02.0NA