Global| Dec 14 2016FOMC Increases Rates As Economy Strengthens
by:Tom Moeller
|in:Economy in Brief
Summary
At today's meeting of the Federal Open Market Committee, the targeted fed funds rate was raised to between 0.50% and 0.75%, from 0.25% to 0.50%. It was the highest target since the end of 2008. The FOMC indicated that an improved [...]
At today's meeting of the Federal Open Market Committee, the targeted fed funds rate was raised to between 0.50% and 0.75%, from 0.25% to 0.50%. It was the highest target since the end of 2008. The FOMC indicated that an improved economic outlook likely would cause the fed funds rate to rise another 0.75 percentage points next year.
The Fed indicated that solid job gains and a lower unemployment rate have accompanied moderate growth in consumer spending. Business investment remains soft. It noted that inflation has increased this year, but remains below the 2% long-run objective.
Moderate economic growth was expected to continue, as labor markets strengthen further. Inflation is expected to rise to 2% as the effects of lower energy prices dissipate.
The Fed expects 2.1% growth in real GDP next year followed by 2.0% growth in 2018 and 1.9% in 2019. A 4.5% unemployment rate is expected for all three years. Core PCE inflation of 1.8% next year was expected to be followed by 2.0% growth in 2018 and 2019.
The press release for today's FOMC meeting can be found here.
Haver's SURVEYS database contains the economic projections from the Federal Reserve Board.
| Current | Last | 2015 | 2014 | 2013 | 2012 | |
|---|---|---|---|---|---|---|
| Federal Funds Rate Target | 0.50%-0.75% | 0.25%-0.50% | 0.13% | 0.09% | 0.11% | 0.14% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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