Written by: Amanda Angulo
The Federal Reserve has been worried. At the end of their two-day monetary policy meeting on Wednesday, they released materials reflecting a downgrade in their economic expectations. In other words, the country is in trouble.
New projections show that the Feds have to lower their forecasts for growth and increase their predictions for unemployment and inflation. For example, the projections indicated an expectation for inflation to grow 5.9% this year, which drops from the 7% estimation from the June meeting.
Additionally, the Federal Reserve also noted that the unemployment rate could be much higher than earlier this summer. It is expected that at the end of this year, the median rate for unemployment is 4.8%, when in June, that number was at 4.5%.
However, the current expectations do not mean they are expected to bring down inflation. In fact, the median forecast for inflation this year has gone from 3.4% to 4.2%. Core inflation, without the accountability of fool and fuel prices, is expected to go from 3% up to 3.7%.
For 2023, the GDP growth has been revised to indicate that the Federal Reserve believes in a supply chain disruption to push growth into the future instead of making a permanent drag. However, the expectations for unemployment for 2023 remain unchanged.
Image from: Caroline Brehman | CQ-Roll Call, Inc. | Getty Images