WASHINGTON — A majority of the Federal Open Market Committee continues to view 2015 as the appropriate time to tighten monetary policy, and believes the country will be well on the road to recovery by then, according to the Fed's latest summary of economic projections released Wednesday.
About half the committee projects that the Fed funds rate, currently at 0% to 0.25%, will have to come up to at least 1% by 2015, the projections show. In addition, 13 of 19 members said there would need to be some policy tightening in 2015. The rate should settle between 4% and 4.5% in the longer term, most members concluded.
The other projections by the panel are quite similar to the September projections. Those predictions show real GDP growing by 1.7% to 1.8% this year, with the pace picking up to between 2.3% and 3.0% in 2013 and reaching 3% to 3.7% growth by 2015.
The group sees unemployment trending steadily lower, dropping to between 7.4% and 7.7% in 2013 and perhaps falling as low as 6% by 2015.
Inflation rate projections held about steady with the previous projections, ranging between 1.6% and 2% over the next several years.