WASHINGTON - Most of the Federal Open Market Committee participants now view 2015 as the most appropriate time for tightening, with 12 of 19 members choosing that year as the right time for policy firming in the Fed's latest summary of economic projections released Thursday.
The projections represent a significant change from the previous release, when the anonymous Fed members were about evenly split between 2014 and 2015. One member selected this year as the right time to tighten policy, with three selecting 2013, two choosing 2014, and one member pushing the timeframe back to 2016.
Most of the members see the target Fed funds rate staying at zero to 0.25% through the next two years, with several seeing rates in the 1.5% to 3% range in 2014 and most seeing it above 1% by 2015. Over the long term, the rate is expected to be 4% to 4.5%, according to predictions.
The other projections by the panel show real GDP growing by 1.7% to 2% this year, with the pace picking up to between 2.5% and 3% in 2013 and reaching 3% to 3.8% growth by 2015.
The group sees unemployment trending steadily lower, dropping to between 7.6% and 7.9% in 2013 and perhaps falling as low as 6% by 2015.
Inflation rate projections held about steady with the Bank's projections in June, holding between 1.6% and 2% over the next several years.