SPIP - June FOMC Meeting: Flexible Expectations Targeting

• Released on 16 June, the FOMC’s Summary of Economic Projections (SEP) implies that the Fed could hike interest rates twice in 2023 instead of 2024 or later, as it had projected in March.
• We see the recent rise in inflation expectations as a welcome development because inflation expectations had likely been anchored below the FOMC’s 2% target.
• The FOMC raised its core PCE inflation forecast to 3.0% in 2021 – a massive revision versus 2.2% projected in March – although it didn’t alter its forecasts further out.

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