“A majority of Federal Reserve officials don’t expect to raise the main interest rate until 2015, when they forecast the jobless rate will fall to between 6 percent and 6.6 percent.
Federal Open Market Committee participants forecast today that gross domestic product will expand 2.3 percent to 3 percent next year, compared with 2.5 percent to 3 percent in September. Estimates for 2014 are from 3 percent to 3.5 percent, versus 3 percent to 3.8 percent in the previous projection, according to the central tendency forecasts, which exclude the three highest and three lowest of 19 projections.
The FOMC earlier today voted to supplement their $40 billion a month of mortgage-bond purchases with $45 billion in monthly Treasury purchases once their Operation Twist program expires at the end of the month. The Fed said interest rates will stay low “at least as long” as theunemployment rate remains above 6.5 percent and if inflation “between one and two years ahead” is projected to be no more than 2.5 percent.
The jobless rate probably will average 7.4 percent to 7.7 percent in the final three months of next year, officials said, versus 7.6 percent to 7.9 percent in September.
Five of 19 officials said the first interest-rate increase since 2006 would be warranted in 2014 or sooner, while 13 said it would occur in 2015. One called for an increase in 2016.
Officials said prices as measured by the personal consumption expenditures price index may rise 1.3 percent to 2 percent next year, versus an increase of 1.6 percent to 2 percent in September. Central bankers have set a 2 percent target for inflation.”
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