Yellen told reporters that U.S. economy is “performing well” and the first rate hike could come as early as next month at the Fed’s October meeting but she admitted, “I can’t give you a recipe.”
According to the latest dot chart, thirteen of 17 Fed members believe that a rate hike will occur this year.
Based on the Fed’s June projection for core PCE inflation, the Fed expects inflation to rise slightly lower to 1.3 percent compared to an earlier projection of 1.4 percent from the 4th quarter of 2014.
For 2016 the June projection shows an increase to 1.8 percent from 1.7 percent, moving closer to the Fed’s 2 percent inflation target which is now projected to be reached in 2017.
GDP for 2015 was also adjusted lower to 1.9 percent in the June projection from 2.1 percent.
But in 2016 U.S. GDP is projected to jump up to 2.5 percent from 2.3 percent.
Unemployment rate in 2015 from the June projection moved higher to 5.3 percent from an earlier 4th quarter forecast of 5.0 percent.