Federal Reserve

Fed keeps its long-run forecast for economic growth unchanged at 1.8%

Key Points
  • The current long-run growth forecast matches the June forecast.
  • Many economists see economic growth cooling off next year and beyond.
  • The Fed is keeping an eye on the pace of economic growth and the possibility of inflation.
The U.S. Federal Reserve building in Washington, D.C.
Adam Jeffery | CNBC

The Federal Reserve kept its long-run forecast for U.S. economic growth unchanged at 1.8 percent.

The central bank updated its economic outlook on Wednesday, after the Federal Open Market Committee announced a quarter-point hike in its benchmark interest rate, to a range of 2 percent to 2.25 percent.

The current long-run growth forecast matches the June forecast.

The Fed is keeping an eye on the pace of economic growth and the possibility of inflation. It also has to weigh the possible effects of trade turmoil with China and other countries, which could slow global growth.

Many economists see economic growth cooling off next year and beyond. But it should be strong in the near term. The Atlanta Fed last month projected GDP would increase 5 percent from July through September, on top of 4.1 percent growth in the second quarter.

In the nearer term, the Fed raised its expectations slightly. Its 2018 growth forecast is 3.1 percent, up 0.3 percentage points. Its forecast for next year is 2.5 percent, up 0.1 points. Its projection for 2020 is unchanged at 2 percent.