The Federal Reserve raised its forecast for US economic growth for 2024 to 2.1% from 1.4% expected in December.
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Fed forecast
The American Central Bank also improved the forecast the country's GDP growth for 2025 – up to 2% from 1.8%, for 2026 – up to 2% from 1.9%.
The Federal Reserve's inflation forecast (PCE index) for the current year was kept at 2.4%, for 2025 it was raised to 2.2% from 2.1%, for 2026 it was left at 2%.
The US unemployment forecast for 2024 was lowered to 4% from 4.1%, for 2025 it was left at 4.1%, for 2026 it was reduced to 4% from 4.1%.
Read: The Fed kept the key rate at 5.25-5.5%
What will happen to the rate
The American Central Bank kept it the base interest rate on federal funds rate at the level of 5.25-5.5% per annum based on the results of the two-day meeting that ended on Wednesday.
Fed policymakers' median forecast calls for the benchmark interest rate to be 4.6% by the end of 2024, a cut of 75 basis points (bps) from current levels. This forecast has not changed compared to December.
However, the median forecast at the end of 2025 now assumes that the rate will be 3.9% (3.6% in December), at the end of 2026 – 3 .1% (2.9% in December).
The dot plot of forecasts published following the March meeting is a chart reflecting the individual expectations of members of the Fed Board of Governors and heads of the Federal Reserve Banks (FRB) in on interest rates, shows that 10 out of 19 US central bankers expect a rate cut in 2024 of at least 75 bps. One of the Fed leaders believes that the rate will be reduced by 100 bps. versus five in December.
Two of the Fed leaders believe the rate will remain at current levels in 2024.