NEW YORK (AP) – Federal Reserve policymakers expect to hike rates just two times next year, down from a previous expectation of three, a sign the Fed foresees a more cautious approach in 2019. They also forecast one additional rate hike in 2020, the same as an earlier projection.
Fed policymakers also took a slightly less bullish view of the U.S. economy. They now project growth will slip to 2.3 percent next year, down from an earlier estimate of 2.5 percent. The Fed releases its economic projections every three months and last did so in September.
The Fed also sees the unemployment rate rising slightly more quickly, reaching 3.8 percent in 2021, up from 3.7 percent in September.
Fed officials also reduced their estimate for the long-run level of the interest rate they control, to 2.8 from 3.0. That is a sign they believe fewer hikes are needed to keep the economy in balance, with growth at a modest pace that doesn’t spur inflation.
(Copyright 2018, The Associated Press. All Rights Reserved.)
