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The Federal Reserve Board and the Federal Open Market Committee (FOMC) have released their economic projections following the September 17-18, 2024, meeting. The projections indicate a stable economic outlook, with moderate GDP growth, easing inflation, and a gradual reduction in interest rates over the coming years.
- GDP growth is forecasted at 2.0% for 2024 through 2027, with the longer-run growth target at 1.8%.
- The unemployment rate is expected to decrease from 4.4% in 2024 to 4.2% by 2027, signaling confidence in a resilient labor market.
- Inflation, measured by PCE inflation, is projected to cool to 2.3% in 2024, and stabilize at the Fed’s target of 2.0% by 2026.
- The federal funds rate, currently at 4.4%, is expected to drop to 2.9% by 2027, reflecting a shift towards more accommodative monetary policy as inflation pressures ease.
These projections demonstrate the Fed’s cautious optimism about the U.S. economy, balancing inflation control with the goal of sustained growth.