The Fed on the 17th delivered its first rate increase in three years; the
dot-plot median shows one additional hike this year and policy rates unchanged
in 2027. New projections show rates falling in 2028 and settling at 3.50–3.75%
in 2029. In June the Fed had expected a 25bp hike this year and a cut in 2027.
The long-run federal funds rate was raised to 3.2% from 3.1%. Eighteen of 19
policymakers submitted rate forecasts, indicating Fed chair Kevin Warsh, as in
June, did not submit a specific projection. Policymakers now expect inflation
this year and over the next few years to be higher than previously projected.
