FOMC Projections and Press Conference

Statement here.

Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET.

Here are the projections. In September, the FOMC participants’ midpoint of the target level for the federal funds rate was 4.625%. The FOMC participants’ midpoint of the target range is now closer to 5.125%.

Current Wall Street forecasts are for GDP to increase in 2022 Q4 over Q4, slightly above FOMC September projections.  These tracking estimates would put Q4/Q4 at 0.63% in 2022.  So, the FOMC revised up 2022 GDP slightly, but revised down 2023 GDP.

GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1
Projection Date	2022	2023	2024	2025
Dec 2022	0.4 to 0.5	0.4 to 1.0	1.3 to 2.0	1.6 to 2.0
Sept 2022	0.1 to 0.3	0.5 to 1.5	1.4 to 2.0	1.6 to 2.0

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 November. So far, the economic slowdown has barely pushed up the unemployment rate, and the FOMC revised down the 2022 projection but revised 2023 up.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2
Projection Date	2022	2023	2024	2025
Dec 2022	3.7	4.4 to 4.7	4.3 to 4.8	4.0 to 4.7
Sept 2022	3.8 to 3.9	4.1 to 4.5	4.0 to 4.6	4.0 to 4.5

² Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of October 2022, PCE inflation was up 6.0% from October 2021. This was below the cycle high of 7.0% YoY in June. The FOMC revised up PCE inflation for 2022.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1
Projection Date	2022	2023	2024	2025
Dec 2022	5.6 to 5.8	2.9 to 3.5	2.3 to 2.7	2.0 to 2.2
Sept 2022	5.3 to 5.7	2.6 to 3.5	2.1 to 2.6	2.0 to 2.2

PCE core inflation was up 5.0% in October year-over-year. This was below the cycle high of 5.4% YoY in February.  Core inflation has picked up more than expected and the FOMC revised up their projections.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1
Projection Date	2022	2023	2024	2025
Dec 2022	4.7 to 4.8	3.2 to 3.7	2.3 to 2.7	2.0 to 2.2
Sept 2022	4.4 to 4.6	3.0 to 3.4	2.2 to 2.5	2.0 to 2.2