Complete Summary of Economic Projections 👈🏽
Commentary
Powell said, "Proceed Carefully" 6-times...I think he's done
He consistently used "Cautious and Careful" to frame his responses. I'd say the Dot Plot was much more hawkish than Powell's actual comments.
- No Officials see more than a 25bps Hike This Year
- The Majority of Officials (12 of 19) Expect one more 25bps hike
Hawkish Comments
If the economy is stronger than expected, we will do more
Energy Prices can impact Inflation
Dovish Comments
- A Soft Landing is No Longer Our Base Case but remains our goal
High energy prices can slow the consumer
The Labor Market is coming into balance
- Shelter Inflation is easing
We tend to look through short-term moves in energy prices
- Energy Prices are Volatile, we focus on core
The rise in long-term yields is mostly not about inflation expectations but more about the growth and supply of treasuries.
The Last three readings of Inflation have been very good, I am well aware that we need more than three good readings.
TRANSLATION: We are close to breaking something and remain cautious. We are not concerned with the current oil prices, and we are seeing progress in the labor market and Shelter prices led by rents. Higher yields aren't a result of excess supply from the treasury, not rising Inflation.
Projections
Median Rates moved up in 2024 (4.6% - 5.1%) & 2025 (3.4% - 3.9%)
Fed expects an increase in 2023 GDP from 1.1% to 2.1% (GPD Stronger than expected)
Fed expects lower Unemployment for 2023 from 4% - 3.8% (Employment stronger than Expected)
Fed expects higher Headline PCE in 2023 from 3.2% to 3.3% (HEADLINE PCE stronger than expected)
Fed Expects Lower Core PCE in 2023 from 3.9% to 3.7% (CORE PCE WEAKER THAN EXPECTED)