On Wednesday, the Federal Reserve announced a 50 basis-point rate hike, which came in as expected. The policy-making committee also expects more interest rate hikes going forward. In addition, the central bank also released its summary of economic projections.
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In September, the Federal Reserve had projected Fed Funds rates of 4.6% and 3.9% for 2023 and 2024, respectively. However, the updated projection now stands at 5.1% and 4.1%, respectively. Moreover, its real GDP forecast for 2023 fell to 0.5%, compared to its September expectation of 1.2%.
Furthermore, PCE inflation is now expected to be 3.1% in 2023. For reference, the previous forecast was 2.8%.
