Federal Reserve — FOMC Statement (USA, 2023)

For release at 2:00 p.m., EDT, March 22, 2023 Summary of Economic Projections In conjunction with the Federal Open Market Committee (FOMC) meeting held on March 21 22, 2023, meeting participants submitted their projections of the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and in ation for each year from 2023 to 2025 and over the longer run. Each participant s projections were based on information available at the time of the meeting, together with her or his assessment of appropriate monetary policy including a path for the federal funds rate and its longer-run value and assumptions about other factors likely to a ect economic outcomes. The longer-run projections represent each participant s assessment of the value to which each variable would be expected to converge, over time, under appropriate monetary policy and in the absence of further shocks to the economy.  Appropriate monetary policy  is de ned as the future path of policy that each participant deems most likely to foster outcomes for economic activity and in ation that best satisfy his or her individual interpretation of the statutory mandate to promote maximum employment and price stability. Page 1 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Table 1. Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents, under their individual assumptions of projected appropriate monetary policy, March 2023 Percent Median1 Central Tendency2 Range3 Variable 2023 2024 2025 Change in real GDP December projection Unemployment rate December projection PCE in ation December projection Core PCE in ation4 December projection Memo: Projected appropriate policy path Federal funds rate December projection 0.4 0.5 4.5 4.6 3.3 3.1 3.6 3.5 5.1 5.1 1.2 1.6 4.6 4.6 2.5 2.5 2.6 2.5 4.3 4.1 1.9 1.8 4.6 4.5 2.1 2.1 2.1 2.1 3.1 3.1 Longer run 1.8 1.8 4.0 4.0 2.0 2.0 2023 2024 2025 0.0 0.8 0.4 1.0 4.0 4.7 4.4 4.7 3.0 3.8 2.9 3.5 3.5 3.9 3.2 3.7 1.0 1.5 1.3 2.0 4.3 4.9 4.3 4.8 2.2 2.8 2.3 2.7 2.3 2.8 2.3 2.7 1.7 2.1 1.6 2.0 4.3 4.8 4.0 4.7 2.0 2.2 2.0 2.2 2.0 2.2 2.0 2.2 Longer run 1.7 2.0 1.7 2.0 3.8 4.3 3.8 4.3 2.0 2.0 2023 2024 2025 -0.2 1.3 -0.5 1.0 3.9 4.8 4.0 5.3 2.8 4.1 2.6 4.1 3.5 4.1 3.0 3.8 0.3 2.0 0.5 2.4 4.0 5.2 4.0 5.0 2.0 3.5 2.2 3.5 2.1 3.1 2.2 3.0 1.5 2.2 1.4 2.3 3.8 4.9 3.8 4.8 2.0 3.0 2.0 3.0 2.0 3.0 2.0 3.0 Longer run 1.6 2.5 1.6 2.5 3.5 4.7 3.5 4.8 2.0 2.0 2.5 2.5 5.1 5.6 5.1 5.4 3.9 5.1 3.9 4.9 2.9 3.9 2.6 3.9 2.4 2.6 2.3 2.5 4.9 5.9 4.9 5.6 3.4 5.6 3.1 5.6 2.4 5.6 2.4 5.6 2.3 3.6 2.3 3.3 Note: Projections of change in real gross domestic product (GDP) and projections for both measures of in ation are percent changes from the fourth quarter of the previous year to the fourth quarter of the year indicated. PCE in ation and core PCE in ation are the percentage rates of change in, respectively, the price index for personal consumption expenditures (PCE) and the price index for PCE excluding food and energy. Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated. Each participant s projections are based on his or her assessment of appropriate monetary policy. Longer-run projections represent each participant s assessment of the rate to which each variable would be expected to converge under appropriate monetary policy and in the absence of further shocks to the economy. The projections for the federal funds rate are the value of the midpoint of the projected appropriate target range for the federal funds rate or the projected appropriate target level for the federal funds rate at the end of the speci ed calendar year or over the longer run. The December projections were made in conjunction with the meeting of the Federal Open Market Committee on December 13 14, 2022. One participant did not submit longer-run projections for the change in real GDP, the unemployment rate, or the federal funds rate in conjunction with the December 13 14, 2022, meeting, and one participant did not submit such projections in conjunction with the March 21 22, 2023, meeting. 1. For each period, the median is the middle projection when the projections are arranged from lowest to highest. When the number of projections is even, the median is the average of the two middle projections. 2. The central tendency excludes the three highest and three lowest projections for each variable in each year. 3. The range for a variable in a given year includes all participants  projections, from lowest to highest, for that variable in that year. 4. Longer-run projections for core PCE in ation are not collected. Page 2 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Figure 1. Medians, central tendencies, and ranges of economic projections, 2023 25 and over the longer run Note: De nitions of variables and other explanations are in the notes to table 1. The data for the actual values of the variables are annual.  3 2 1012345620182019202020212022202320242025Median of projectionsCentral tendency of projectionsRange of projectionsActualPercentChange in real GDPLongerrun123456720182019202020212022202320242025PercentUnemployment rateLongerrun123456720182019202020212022202320242025PercentPCE inflationLongerrun123456720182019202020212022202320242025PercentCore PCE inflationLongerrunPage 3 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Figure 2. FOMC participants  assessments of appropriate monetary policy: Midpoint of target range or target level for the federal funds rate Note: Each shaded circle indicates the value (rounded to the nearest 1/8 percentage point) of an individual participant s judgment of the midpoint of the appropriate target range for the federal funds rate or the appropriate target level for the federal funds rate at the end of the speci ed calendar year or over the longer run. One participant did not submit longer-run projections for the federal funds rate. 0.00.51.01.52.02.53.03.54.04.55.05.56.0202320242025Longer runPercentPage 4 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Figure 3.A. Distribution of participants  projections for the change in real GDP, 2023 25 and over the longer run Note: De nitions of variables and other explanations are in the notes to table 1. 2468101214161820 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.10.0 0.10.2 0.30.4 0.50.6 0.70.8 0.91.0 1.11.2 1.31.4 1.51.6 1.71.8 1.92.0 2.12.2 2.32.4 2.5Percent range March projectionsDecember projectionsNumber of participants20232468101214161820 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.10.0 0.10.2 0.30.4 0.50.6 0.70.8 0.91.0 1.11.2 1.31.4 1.51.6 1.71.8 1.92.0 2.12.2 2.32.4 2.5Percent rangeNumber of participants20242468101214161820 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.10.0 0.10.2 0.30.4 0.50.6 0.70.8 0.91.0 1.11.2 1.31.4 1.51.6 1.71.8 1.92.0 2.12.2 2.32.4 2.5Percent rangeNumber of participants20252468101214161820 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.10.0 0.10.2 0.30.4 0.50.6 0.70.8 0.91.0 1.11.2 1.31.4 1.51.6 1.71.8 1.92.0 2.12.2 2.32.4 2.5Percent rangeNumber of participantsLonger runPage 5 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Figure 3.B. Distribution of participants  projections for the unemployment rate, 2023 25 and over the longer run Note: De nitions of variables and other explanations are in the notes to table 1. 24681012141618203.2 3.33.4 3.53.6 3.73.8 3.94.0 4.14.2 4.34.4 4.54.6 4.74.8 4.95.0 5.15.2 5.3Percent range March projectionsDecember projectionsNumber of participants202324681012141618203.2 3.33.4 3.53.6 3.73.8 3.94.0 4.14.2 4.34.4 4.54.6 4.74.8 4.95.0 5.15.2 5.3Percent rangeNumber of participants202424681012141618203.2 3.33.4 3.53.6 3.73.8 3.94.0 4.14.2 4.34.4 4.54.6 4.74.8 4.95.0 5.15.2 5.3Percent rangeNumber of participants202524681012141618203.2 3.33.4 3.53.6 3.73.8 3.94.0 4.14.2 4.34.4 4.54.6 4.74.8 4.95.0 5.15.2 5.3Percent rangeNumber of participantsLonger runPage 6 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Figure 3.C. Distribution of participants  projections for PCE in ation, 2023 25 and over the longer run Note: De nitions of variables and other explanations are in the notes to table 1. 24681012141618201.7 1.81.9 2.02.1 2.22.3 2.42.5 2.62.7 2.82.9 3.03.1 3.23.3 3.43.5 3.63.7 3.83.9 4.04.1 4.2Percent range March projectionsDecember projectionsNumber of participants202324681012141618201.7 1.81.9 2.02.1 2.22.3 2.42.5 2.62.7 2.82.9 3.03.1 3.23.3 3.43.5 3.63.7 3.83.9 4.04.1 4.2Percent rangeNumber of participants202424681012141618201.7 1.81.9 2.02.1 2.22.3 2.42.5 2.62.7 2.82.9 3.03.1 3.23.3 3.43.5 3.63.7 3.83.9 4.04.1 4.2Percent rangeNumber of participants202524681012141618201.7 1.81.9 2.02.1 2.22.3 2.42.5 2.62.7 2.82.9 3.03.1 3.23.3 3.43.5 3.63.7 3.83.9 4.04.1 4.2Percent rangeNumber of participantsLonger runPage 7 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Figure 3.D. Distribution of participants  projections for core PCE in ation, 2023 25 Note: De nitions of variables and other explanations are in the notes to table 1. 24681012141618201.7 1.81.9 2.02.1 2.22.3 2.42.5 2.62.7 2.82.9 3.03.1 3.23.3 3.43.5 3.63.7 3.83.9 4.04.1 4.2Percent range March projectionsDecember projectionsNumber of participants202324681012141618201.7 1.81.9 2.02.1 2.22.3 2.42.5 2.62.7 2.82.9 3.03.1 3.23.3 3.43.5 3.63.7 3.83.9 4.04.1 4.2Percent rangeNumber of participants202424681012141618201.7 1.81.9 2.02.1 2.22.3 2.42.5 2.62.7 2.82.9 3.03.1 3.23.3 3.43.5 3.63.7 3.83.9 4.04.1 4.2Percent rangeNumber of participants2025Page 8 of 17 For release at 2:00 p.m., EDT, March 22, 2023 Figure 3.E. Distribution of participants  judgments of the midpoint of the appropriate target range for the federal funds rate or the appropriate target level for the federal funds rate, 2023 25 and over the longer run Note: De nitions of variables and other explanations are in the notes to table 1. 24681012141618201.88 2.122.13 2.372.38 2.622.63 2.872.88 3.