The Federal Reserve will on Wednesday release a new set of economic projections and all eyes will be on two vital questions for monetary policy: will US central bankers signal they expect to start raising interest rates in 2023, instead of 2024? And how high do they expect inflation to rise this year and next?
The Fed will provide clear answers in a table showing, anonymously, all its officials’ forecasts. It has been publishing this data for 14 years under a transparency drive initiated by former chair Ben Bernanke.
The projections can be a useful signalling tool for the central bank, but sometimes they muddle its message. Top Fed officials routinely remind the markets, the media and the public that they should not be used as a guide to policy, which is set in the formal statement from the Federal Open Market Committee — but it can be hard for investors to resist.