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The consensus is that there will no change in policy at the FOMC meeting this week, and that the Fed will continue to emphasize “patience”. Also the Fed is expected to announce the conclusion of the balance sheet runoff later this year (perhaps around September)

There might some slight downward revisions in the economic projections.

Here are the December FOMC projections.

The FOMC is projecting Q4 over the previous Q41, and 2018 came in at 3.1% real growth.  (Note: Annual real GDP increased 2.9% in 2018)

Most analysts expect growth to slow in 2019, and Q1 forecasts are around 1% (many below 1%).   So projections for 2019 might be revised down further.

GDP projections of Federal Reserve Governors and Reserve Bank presidents
Change in
Real GDP1
2018 2019 2020
Dec 2018 3.0 to 3.1 2.3 to 2.5 1.8 to 2.0
Sep 2018 3.0 to 3.2 2.4 to 2.7 1.8 to 2.1

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 3.8% in February.  (The unemployment rate averaged 3.8% in Q4 2018).  The unemployment rate projection for 2019 will probably be unchanged or revised up slightly.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents
Unemployment
Rate2
2018 2019 2020
Dec 2018 3.7 3.5 to 3.7 3.5 to 3.8
Sep 2018 3.7 3.4 to 3.6 3.4 to 3.8

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

As of December 2018, PCE inflation was up 1.7% from December 2017.  This was below the projected range for 2018.   However oil prices have stabilized (after falling sharply), and it seems likely any revision to 2019 projections will be minor.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents
PCE
Inflation1
2018 2019 2020
Dec 2018 1.8 to 1.9 1.8 to 2.1 2.0 to 2.1
Sep 2018 2.0 to 2.1 2.0 to 2.1 2.1 to 2.2


PCE core inflation was up 1.9% in December year-over-year. Any change to Core PCE inflation for 2019 will probably be minor.

Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents
Core
Inflation1
2018 2019 2020
Dec 2018 1.8 to 1.9 2.0 to 2.1 2.0 to 2.1
Sep 2018 1.9 to 2.0 2.0 to 2.1 2.1 to 2.2


In general the data has been somewhat softer than the FOMC’s December projections.
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