FOMC Economic Forecasts Leaked

27 July,, Lagos – According to a Federal open market committee document which was “inadvertently” released last month, staff at the Federal Reserve board see a single quarter-point U.S. rate hike by year’s end, adding to growing possibility of coming rate hikes.

The Federal Reserve economic projections which was unintentionally released, contained some vital information and update on staff economic forecasts, and others categorised as confidential FOMC information. In a press release, the Fed noted that the document was left online: “because the information has already been released.”

Based on the FOMC economic forecasts leaked, besides the fact that staff are anticipating a single quarter-point U.S. rate hike by year’s end, the document also showed inflation stuck in low gear for five more years, and an economy growing more slowly than expected by U.S. policymakers. Two files contained charts of the staff’s projections for economic variables such as the unemployment rate, the core inflation rate, and gross domestic product growth as well as the staff’s assumption for the path of the federal funds rate target selected by the FOMC. Another file contained computer code used to generate a table displaying staff economic projections.

Following the stipulated due process for such circumstances in accordance with the FOMC’s Program for Security of FOMC Information, the case has been duly referred to the Board’s Inspector General.

Although it is almost certain that rates will be hiked this year, it remains unclear when this will occur as many investors and traders anticipate September. The last FOMC minutes was largely Perceived by markets as a disappointment. Reason being that the report signalled that the Central bank is reluctant to raise rates for the first time in nine years, striking quite a dovish tone, even though members agreed the economy is getting better.

In separate independent statements, the IMF and the world bank have advised the US central bank to hold on raising rates till next year, arguing that this gives the Fed ample time to confirm the economic situation. Also, the IMF estimates that the personal consumption expenditures (PCE), which is the Fed’s favoured measure of inflation will hit the 2% inflation target only by 2017.

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