FOMC Forecast revisions
FOMC Forecast revisions, to be released Wednesday in conjunction with the FOMC statement, should reveal big boosts in the 2017 GDP estimates, alongside modest upward tweaks in the 2018 PCE chain price estimates and small trimmings in the jobless rate estimates across the forecast horizon. For GDP, the Fed's December estimates incorporated the CBO scoring of the Senate tax bill, but not the more aggressive CBO scoring of the final tax law, and the Fed has yet to incorporate growth boosts from the February budget bill. Analysts assume GDP growth boosts of 0.2%-0.3% through 2019, and smaller boosts in 2020. Analysts also expect 0.1% increases in the Fed's 2018 headline and core PCE chain price estimates, though analysts expect 2019-20 estimates to remain the same. The jobless rate estimates could be reduced by 0.1% across the board, given a stronger growth path for payrolls. The market is focused on the dot-plot, but analysts think that policymakers will refrain from committing to a steeper tightening path, leaving only tiny upward tweaks in a few rate forecasts. page for a table of our assumptions for the Fed's revised forecasts.