Statement here. Hawkish pause with dot plot showing 50bp of additional hikes!
Here are the projections. In March, the FOMC participants’ midpoint of the target level for the federal funds rate was somewhat above 5.125%. The FOMC participants’ midpoint of the target range is now at 5.625%.
GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1
June 20230.7 to 1.20.9 to 1.51.6 to 2.0
March 20230.0 to 0.81.0 to 1.51.7 to 2.1
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 May. To reach the mid-point of the March FOMC projections for Q4 2023, the economy would likely have to lose over 1 million jobs by Q4. The FOMC revised down their projected unemployment rate for Q4 2023.
Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2
June 20234.0 to 4.34.3 to 4.64.3 to 4.6
March 20234.0 to 4.74.3 to 4.94.3 to 4.8
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.
As of April 2023, PCE inflation increased 4.4 percent year-over-year (YoY), up from 4.2 percent YoY in March, and down from the recent peak of 7.0 percent in June 2022. The projection of PCE inflation for Q4 2023 will might be revised up slightly, however May and June 2022 PCE inflation was very high, and YoY PCE inflation will likely decrease sharply over the next two months. The FOMC revised down slightly their PCE inflation projections.
Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1
June 20233.0 to 3.52.3 to 2.82.0 to 2.4
March 20233.0 to 3.82.2 to 2.82.0 to 2.2
PCE core inflation increased 4.7 percent YoY, up from 4.6 percent in March, and down from the recent peak of 5.4 percent in February 2022.; This remains a concern for the FOMC, however this includes shelter that was up 8.4% YoY in April (even though asking rents are mostly unchanged YoY). The FOMC revised up their core PCE projections.
Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1
June 20233.7 to 4.22.5 to 3.12.0 to 2.4
March 20233.5 to 3.92.3 to 2.82.0 to 2.2