- Wednesday's forecast showed nine of the 18 FOMC members expect a rate hike in 2022.
- That's up from seven in June's Fed projections.
- The Fed also dialed down its GDP projects for this year and increased its inflation forecast for 2021.
Half of the Federal Reserve members now see the first interest rate hike in 2022, according to the central bank's so-called dot plot of projections.
Wednesday's forecast showed nine of the 18 FOMC members expect a rate hike in 2022. That's up from seven in June's Fed projections.
Additionally, all but one member is expecting at least one rate hike by the end of 2023. Thirteen members are forecasting two rate hikes through 2023.
Every quarter, members of the committee forecast where interest rates will go in the short, medium and long term. These projections are represented visually in charts below called a dot plot.
The "longer run" dots remained unchanged from the FOMC's March meeting.
The Fed also dialed down its GDP projects for this year, according to its Summary of Economic Projections released Wednesday.
The central bank now expects real gross domestic product to grow 5.9% in 2021, down from its estimate of 7.0% growth from the June meeting. The Fed raised its GDP projections for 2022 and 2023 to growth of 3.8% and 2.5%, respectively.
Source: Federal Reserve
The Fed also increased its inflation forecast for the year. It now sees inflation running to 4.2% this year, above its previous estimate of 3.4%. The central bank also slightly hiked its PCE inflation estimate for 2022.
Core PCE inflation expectations ramped up to 3.7% in 2021, up from June's forecast of 3%. Core PCE for 2022 is now expected at 2.3% and for 2023 is forecast to be 2.2%.
The central bank now sees the unemployment rate dropping to 4.8% this year, higher that its previous estimate of 4.5%.
The Fed held benchmark interest rates near zero on Wednesday.
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