The Federal Reserve’s economic outlook isn’t so much pessimistic as it is uncertain, with expectations running a wide gamut from a plodding recovery to a sharp rebound.
If that sounds a lot like the market lately, it’s probably not a coincidence.
Following its two-day meeting earlier this week , the Fed released its Summary of Economic Projections for GDP, unemployment, inflation and interest rates.
The estimates largely reflected the current unprecedented downturn followed by expectations for varying levels of growth ahead.
Specifically on GDP, which measures goods and services produced and is the broadest yardstick for economic growth, the median figures in each of the three years for which estimates were provided masked wide disparities of views from the policymaking Federal Open Market Committee’s 17 members.
For 2020, the median expectation was for a GDP decline of 6.5%. But that was merely the midpoint of forecasts that ranged all the way from -10% to -4.2%.
The difference gets even more pronounced in 2021, where the median is a 5% gain but the range goes from -1% — in essence, a continuation of the […]
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