Recent Declines in the Fed’s Longer-Run Economic Projections

Abstract: This Chicago Fed Letter investigates the evolution of longer-run economic projections made by participants of the Federal Reserve?s monetary policy committee, the Federal Open Market Committee (FOMC), in its Summary of Economic Projections (SEP), and by the private sector. Over the past few years, the FOMC?s longer-run projections for economic growth, unemployment, and the federal funds rate have fallen quite dramatically. We verify that these views are shared by the private sector and show that the declines are not unprecedented in magnitude, but the projections have reached historical lows. We point to some reasons for these developments and touch on some implications for monetary policy.

Keywords: Federal Open Market Committee (FOMC); monetary policy;

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Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Chicago Fed Letter

Publication Date: 2017

Order Number: 375