Projections released in the Fed’s dot-plot showed the central bank would hike rate to a median 5.6% by the end of 2023, up from the current range between 5.25%-5.5%. Twelve Fed officials at the meeting penciled in the additional hike, while seven opposed it. There are two more policy meetings left in the year.
Then the rate-setting Federal Open Market Committee projected two rate cuts in 2024, which is two fewer than its forecast in June. That would put the funds rate around 5.1%.
The dot plot also moved higher for 2025, with the median outlook at 3.9%, compared with 3.4% previously.
Here are the Fed’s latest targets:
Fed members also updated its Summary of Economic Projections, revising their 2023 economic growth expectations up sharply. The Committee now expects gross domestic product increase by 2.1% this year, more than double the 1% estimate from June.
As for inflation, the Fed expects that the core personal consumption expenditures price index would decline to 3.7%, down 0.2 percentage points from June.
The projection for the unemployment rate now stands at 3.8%, compared to 4.1% previously.
— CNBC’s Jeff Cox contributed reporting.