The Federal Reserve dialed up its growth expectations slightly while keeping its inflation projection unchanged, according to its Summary of Economic Projections.
Source: Federal Reserve
The central bank now expects GDP to grow at a 2.2% pace for 2019, versus the 2.1% forecast in June. The unemployment rate is expected to rise to 3.7% this year, slightly above the 3.6% projection in June.
The GDP outlook for 2020 stayed unchanged at 2%.
The Fed still expects headline inflation to grow at 1.5% this year, while its expectations for core inflation, which excludes volatile food and energy prices, stayed at 1.8%.
The Federal Open Market Committee approved a much-anticipated quarter-point interest rate cut on Wednesday, taking down its benchmark overnight lending rate to a target range of 1.75% to 2%. The Fed sees no further rate cuts in 2019 and 2020, but policymakers are divided in its rate outlook.
The economy grew at a 2.0% annualized rate in the second quarter, slower than a 3.1% growth rate in the January-March quarter. The unemployment rate stayed at a historic low of 3.7% in August.