TechFlow news: According to the Federal Reserve minutes, since mid-March when stress emerged in the banking sector, spending and real activity indicators have performed stronger than expected. As a result, participants no longer anticipate a mild economic recession by year-end. However, staff still projects that real GDP growth in 2024 and 2025 will be below their estimates of potential output growth, leading to a slight increase in the unemployment rate relative to current levels.
Participants also expect overall and core PCE price inflation to decline over the next few years. Most of the decline in core inflation is anticipated to occur in the second half of 2023, with forward-looking indicators suggesting a slowdown in housing services prices. Core non-housing services prices and core goods prices are expected to ease further through the remainder of 2023. As supply-demand imbalances continue to resolve, inflation is expected to ease further in 2024. By 2025, total PCE price gains are projected at 2.2%, and core inflation is projected at 2.3%.
