Federal Reserve officials project rate increases in 2023

US Federal Reserve (FED) officials raised its forecasts for the country’s economic growth, while leaving the unemployment rate and interest rates unchanged, despite domestic inflation rose.

When concluding the two-day meeting, FED´s Federal Open Market Committee (FOMC) reported that progress in vaccination campaign reduced Covid-19 spread, so that both economic and employment indicators ‘have increased’.

In addition, FOMC reiterated its promise to wait for ‘further substantial progress’ before beginning to shift policies less geared towards coronavirus pandemic and much more to a fully open economy.

In its economic projections, FED particularly noted the sharp rebound in growth that now it has seen Gross Domestic Product (GDP) 7% in 2021, compared to 6.5% in March, and also a 3.3% in 2022 and 2.4% in 2023.

Meanwhile, FED argued that inflation would reach 3.4% in 2021, a sharp rise from previous 2.4%.

FED also projected unemployment rate at 4.5% in 2021, unchanged from previous forecast, and 3.8% in 2022.

Regarding interest rates, FED kept them unchanged, ranging from zero to 0.25%, despite the inflation rebound that soared in May to record 5% year-on-year rise, the highest rise since 2008.

‘Inflation has increased, largely reflecting transitory factors,’ FED reported.