Chicago Fed Symposium: Growth Steady, Inflation Off

Economic growth will be steady, inflation lower, and the unemployment rate will rise in 2008, according to predictions from the Federal Reserve Bank of Chicago’s Economic Outlook Symposium released yesterday. Real gross domestic product is seen rising 2.5% in 2007 and 2008, while inflation, as measured by the consumer price index, will rise 3.6% this year and 2.6% next, symposium participants predicted. They see inflation at 4.7% by year-end and 5.0% by the end of 2008. This suggests “that overall growth in the economy is somewhat below potential,” the Chicago Fed said.“Short-term interest rates are expected to rise 17 basis points in 2008, while long-term rates are predicted to increase 30 basis points over the same time period,” the Fed said. “The trade-weighted dollar is expected to edge lower in 2008.”