Federal Reserve officials raised their expectations for the target range for interest rates at the end of this year and next and indicated that they expect more inflation to recede in the short term than they did three months ago.
New quarterly forecasts from US central bank officials, along with a decision to increase interest rates by 75 basis points, showed that their average forecast for the benchmark interest rate is to rise to 3.4 percent by the end of 2022. Their expectations in March were at 1.9 percent .
The federal funds rate at the end of 2023 is now expected to be 3.8 percent, up from the 2.8 percent forecast in March, while it is expected to reach 3.4 percent at the end of 2024, compared to 2.8 percent in the March forecast, reflecting expectations that the central bank will cut interest rates by then.
Federal Reserve officials expect the annual inflation rate to reach 5.2 percent at the end of this year, up from their 4.3 percent forecast in March.
They also expect an unemployment rate of 3.7 percent at the end of 2022, compared to 3.4 percent in their forecast in March. The unemployment rate in the United States was 3.6 percent in May.
