The FOMC dot-plot projections
The FOMC dot-plot projections were tweaked only slightly lower as analysts had expected, though some in the markets had anticipated larger downward bumps with the recent lean path for most core inflation metrics on the assumption that the Fed would get cold feet with regard to normalizing policy. Yet, the lower-end estimates for the long-run fed funds rate outlook were revised lower, with the central tendency now at 2.5%-3.0% versus 2.8%-3.0%, and the full range at 2.3%-3.5% versus 2.5%-3.5%. Analysts also saw the addition of 2020 estimates, and these included a jobless rate climb in 2020 to 4.8% from the most pessimistic participant. Dovish Fed members appear to see a very low peak for the funds rate for this cycle, with the lowest at the current 1.1% throughout the forecast horizon, and the low-end of the central tendency forecasts at just 2.5% by 2020.