The median average of the central bank's updated forecasts - also referred to as the "dot plots" - called for interest rates to end the year around at 2.4%, up from March's projection of 2.1%; The forecasts suggest the Fed will raise interest rates two more times this year. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body.
In March, the dot plot, which reflects where voting FOMC members stand, showed an equal split between those who favored three rate increases this year and those who favored four.
"Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly", the Fed wrote in its statement Wednesday announcing the interest rate hike.
The central bank also lifted its growth forecast to 2.8 percent this year, up a small amount from its projection of 2.7 annual growth in March. Investors had given just over a 91 percent chance of a rate rise on Wednesday, according to an analysis by CME Group. It's the second rate hike under Powell, a Republican appointed to lead the Fed by President TrumpDonald John TrumpWhat you need to know about Tuesday's elections Danny Tarkanian wins Nevada GOP congressional primary Laxalt, Sisolak to face off in Nevada governor's race MORE.
Along with rising interest rate expectations.
Fed policy makers now see USA unemployment at 3.6 percent in the fourth quarter, followed by 3.5 percent in 2019 and 2020, based on median projections.
Officials lowered their jobless-rate estimates after unemployment fell to 3.8 percent as of May, matching April 2000 as the lowest reading since 1969. With higher interest rates, this means that real interest rates will push higher. That compares with March's forecasts for 3.8 percent this year and 3.6 percent in the following two years.
Core inflation projections, which strip out volatile food and energy prices, is expected to tick slightly higher to 2.0% this year, up from March's projection of 1.9%. USA payrolls expanded by more than 1 million workers in the first five months of 2018, reaching the milestone faster than in the previous two years. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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