Fed Expects Slower Inflation In 2015, But Little Long-term Change

MarketWatch Pulse

The Federal Reserve on Wednesday predicted inflationary pressures will diminish further in 2015 because of falling oil prices, but the central bank sees little change in its long-term inflation outlook. The Fed predicted overall inflation as measured by the PCE index will have a core tendency of 1% to 1.6% next year instead of 1.6% to 1.9%. Yet core inflation, which strips out energy and food, is barely expected to show any change. The Fed estimates the central tendency of core inflation to be 1.5% to 1.8% in 2015 and 1.7% to 2% in 2016. The bank also made no change to its forecast for growth of 2.6% to 3% in 2015.

Copyright © 2014 MarketWatch, Inc.

Continue Reading Below