The review of the Macroeconomic forecasts of the Federal Reserve at today’s meeting has confirmed the fears that the US economy is cooling. The economic growth prospects have been cut for this year and the next two, while inflation increases for this year and 2026, moving away from the objective of price stability that the agency maintains. The fears of the investors of the last weeks, who have begun to discount a cooling of the US economy, are thus confirmed by the Fed. Of course, yes, There is neither recession or stagnation in sight, nor a worrying increase in inflationso the stagflation scenario, for now, is out of the table in the eyes of the Fed.
The change in forecasts has been especially significant in the front of economic growth. If the Fed expected in December that GDP grow at a rate of 2.1% this year, now it expects it to do it at 1.7%, four tenths slower. By 2026 the estimate goes from 2% to 1.8%, while by 2027 it is cut from 1.9% to 1.8%. In the long term, yes, it remains unchanged, in 1.8%.
As for inflation, the Fed expected in December that it increased at a rate of 2.5% this year, and now hopes to do it at 2.7%, which, which Rave compliance with the price stability objective that maintains the institution. By 2026 the estimate increases one tenth, going from 2.1%to 2.2%, but by 2027, and in the longest, the figure does not change, and endures in 2%, the objective that the American central bank seeks.
Unemployment is the least estimation changes has sufferedwith a deterioration only for this year, one tenth: the Fed goes from waiting for an unemployment rate of 4.3%, to forecast 4.4%. By 2026 and 2027 they remain at 4.3%, and for the long term, it endures at 4.2%.
Type projection does not move
In the review of the Fed forecast picture, the points graph (Dot Plot) It remains without any change. For many investors, this graph is the key to deciphering the road map that will follow the Fed in the coming months, and the fact that it remains unchanged is a signal from the central bank that its macroeconomic perspectives have not changed so much.
The members of the Federal Committee of the open market maintain the estimate that there will be two type cuts this year of 25 basic points each, until they leave the money in the fork of 3.75% – 4%. In 2026, if their forecasts are met, there will be two other type cuts of the same caliber, until they are left at 3.25% – 3.5%, and by 2027 they expect only one cut, which will leave the price of money between 3% and 3.25%.
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