Fed Lowers Real GDP, Inflation Expectations and Interest Rate Expectations

In the few minutes since the release of the FOMC statement and since the Fed dropped the word "patient" as expected, the S&P 500 has risen by 30 points.



Here are a few takeaways from the latest Fed projections and interest rate dot plot.

1. Real GDP expectations have again been lowered. Real GDP projections are now lower for 2015, 2016 and 2017
2. The unemployment rate projection has been lowered for 2015, 2016, and 2017 as well. 
3. The projections for the headline PCE have been cut nearly in half for 2015
4. Core-PCE projections have been lowered slightly for 2015 and 2016. 
5. The interest rate dot plot is forecasting lower rates in 2015, 2016, and 2017 than previously projected in December based on where the majority of dots are congregating. A majority of dots are huddled between 50-75 basis points for 2015. In December, A majority of dots were huddled around 75-125 basis points. Similarly, 2016 interest rate expectations have been lowered from around 200 basis points to 150-175 basis points. 

Latest Fed Economic Projections


Latest Dot Plot


December's Dot Plot