Almost three out of four professional forecasters expect inflation to be near the Federal Open Market Committee’s 2% target, according to the Survey of Professional Forecasters released by the Federal Reserve Bank of Philadelphia Friday.
Only eight of the 31 respondents said the Fed would not achieve its goal, and none expected inflation to go higher than 3.05% by 2021.
Inflation, as measured by the consumer price index, is seen averaging 2.1% this quarter, up slightly from the last survey’s estimate. When using personal consumption expenditures to measure inflation, the forecaster predicted 2.0% inflation this quarter, up from 1.7% in the last survey.
Annual PCE inflation should average 2.1% this year, up from the 1.9% estimate three months ago, 2.0% next year, as previously estimated, and 2.2% in 2014, up from 2.1%.
Annual CPI inflation is expected to average 2.3% this year, up from the estimate of 2.0% in the last survey; 2.1% next year, down from 2.2%; and 2.5%t in 2014, up from 2.3%.
Year over year, the forecasters predict real gross domestic product growth of 2.3% this year and 2.7% next, unchanged from the previous survey. The forecasters see real GDP gaining 3.1% in 2014 and 3.4% in 2015.