by Calculated Risk on 9/18/2022 09:37:00 AM
Expectations are the FOMC will announce a 75bp rate increase in the federal funds rate at the meeting this week, although some analysts think a 100bp rate increase is possible.
From Goldman Sachs:
Wall Street forecasts have been revised down further since June due to the ongoing negative impacts from the pandemic. the war in Ukraine and financial tightening, and the FOMC will likely revise down their GDP projections. For example, from Goldman Sachs:
1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
The unemployment rate was at 3.7% in August. So far, the economic slowdown has barely pushed up the unemployment rate.
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.
As of July 2022, PCE inflation was up 6.3% from July 2021. This was below the cycle high of 6.8% YoY in May. Analysts are expecting inflation to decline slowly, but the Q4 2022 year-over-year change will likely be revised up.
PCE core inflation was up 4.6% in July year-over-year. This was below the cycle high of 5.3% YoY in February.