Fed policymakers forecast one more rate hike this year
Federal Reserve officials have forecast one additional interest rate increase this year, raising rates by a quarter of a percentage point to 3.75%-4.00% on Wednesday. They expect to maintain the current rate in 2027, according to quarterly projections released after their latest policy meeting. The Fed's new outlook indicates that inflation will stay higher than their 2% target in the near term, with a median forecast of 3.7% for 2026, up from the June projection of 3.6%.
Officials expect the Personal Consumption Expenditures Price Index to reach 2.3% next year and 2.1% by 2028, compared to the June forecast of 2% for both years. The Fed anticipates steady economic growth and low unemployment, with GDP growth projected at 2.3% this year, 2.4% in 2027, and a steady unemployment rate of 4.1% throughout 2029.
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