Majority of Fed members forecast three rate hikes by 2022 to fight inflation

A child walks past the Marriner S. Eccles Federal Reserve Board Building on Constitution Avenue, NW, on Monday, April 26, 2021.

Tom Williams | CQ-Roll Call, Inc. | beautiful pictures

Much of the Federal Reserve sees three rate hikes in 2022, according to the central bank’s forecast.

Wednesday’s forecast shows that the 12 Federal Open Market Committee members expect at least three rate hikes over the next year. Five members expect two rate hikes and one member expects one hike in 2022.

That’s the word Forecast for September where half of Fed members have seen at least one increase in 2022.

Quarterly, committee members forecast where interest rates will go in the short, medium and long term. These projections are represented visually in the diagrams below known as dot plots.

Here are the Fed’s latest goals, announced in Wednesday’s statement:

Here is the Fed forecast for September 2021:

The “longer-running” dots remained unchanged from the September FOMC meeting.

The Fed also rejected its GDP projections for this year, according to its Summary of Economic Forecasts released on Wednesday.

The central bank now expects real gross domestic product to grow 5.5% in 2021, down from an estimate of 5.9% growth from its September meeting.

The Fed raised its GDP forecast to 4.0% growth in 2022, up from 3.8%. The central bank downgraded its GDP forecast for 2023 to 2.2% growth, down from September’s 2.5% growth forecast in 2023. Majority of Fed members forecast three rate hikes by 2022 to fight inflation

Sarah Ridley

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