Those looking for general inflation should take a look at this. Food and health ins. might increase but unemployment pressures will keep prices down.
The revised forecasts will show how the Fed became much more pessimistic over the summer and also highlight fears among a few members of the FOMC that some of today’s 9.6 per cent unemployment rate is structural and will take years to cure.
When the FOMC published its last forecasts in June most members thought that 2011 growth would be between 3.5 and 4.2 per cent, but many now think growth will be between 3 and 3.5 per cent, and some expect less than that.
The committee will also issue 2013 forecasts for the first time and officials who supported further asset purchases are likely to predict that core inflation will stay below the Fed’s 2 per cent goal for the next three years.
“It is not unreasonable to expect 1 per cent inflation in 2012.
Unless the actual conditions turn out to be very different from my forecast, inflation of less than 1.5 per cent in 2013 is a strong possibility,” said Charles Evans,