Most analysts expect there will be no change to FOMC policy at this meeting, keeping the target range for the federal funds rate at 5‑1/4 to 5-1/2 percent.
emphasis addedAnd from Goldman Sachs economists: “Fed officials appear to have signaled that they will not be hiking at their November meeting next week, and we interpret their recent comments to imply that most would prefer not to hike again, consistent with our forecast. … the story of the year so far has been that economic reacceleration has not prevented further labor market rebalancing and progress in the inflation fight. We expect this to continue in coming months, with core PCE on track to undershoot the FOMC’s year-end projections.”
GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1
Sept 20231.9 to 2.21.2 to 1.81.6 to 2.0 June 20230.7 to 1.20.9 to 1.51.6 to 2.0
1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
The unemployment rate was at 3.8% in September. The FOMC’s unemployment rate projection for Q4 is probably close.
Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2
Sept 20233.7 to 3.93.9 to 4.43.9 to 4.3
June 20234.0 to 4.34.3 to 4.64.3 to 4.6
2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.
As of September 2023, PCE inflation increased 3.4 percent year-over-year (YoY), unchanged from 3.4 percent YoY in August, and down from the recent peak of 7.1 percent in June 2022. It appears YoY PCE inflation will be close to the FOMC projection for Q4.
Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1
Sept 20233.2 to 3.42.3 to 2.72.0 to 2.3June 20233.0 to 3.52.3 to 2.82.0 to 2.4
PCE core inflation increased 3.7 percent YoY, down from 3.8 percent in August, and down from the recent peak of 5.6 percent in February 2022. This remains a concern for the FOMC, however this includes shelter that was up 7.2% YoY in September (even though asking rents are mostly unchanged YoY). Also, core PCE inflation was fairly high in Q4 2022, and it seems likely YoY core PCE inflation will be at or below the low end of the FOMC Q4 projection.
Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1
Sept 20233.6 to 3.92.5 to 2.82.0 to 2.4
June 20233.7 to 4.22.5 to 3.12.0 to 2.4