Global Courant
ISTANBUL
The US Federal Reserve expects two more rate hikes this year as the central bank raises its final rate forecast, according to forecast materials released Wednesday.
The terminal interest rate, the peak at which the federal funds rate is expected to climb before lowering, was revised to 5.6% from the previous estimate of 5.1% in March.
This indicates that the Fed may raise two rates, 25 basis points each, and move the fed funds rate to the 5.5% to 5.75% range at its remaining meetings this year.
The Fed’s next two-day meetings will end on July 26, then September 20, November 1, and finally December 13.
Core PCE projection revised upward
The central bank also revised its 2023 growth forecast for the US economy to 1% from its previous forecast of 0.4% in March.
The personal consumption expenditures (PCE) price index, which is the central bank’s preferred inflation indicator, was revised from 3.3% to 3.2% for this year.
Core PCE inflation was revised to 3.9% for 2023 from the 3.6% forecast made three months ago.
According to forecasts, the unemployment rate is expected to decrease to 4.1% in 2023, from the 4.5% expected in March.
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