Oil prices to push up inflation: Chicago Fed survey
GDP will be stronger this year than in 2017, but will dip in 2019, while inflation will also spike this year before moderating next year, according to the median projection from participants at the Federal Reserve Bank of Chicago’s automotive outlook symposium.
GDP will grow at a 2.8% rate this year (after 2.6% in 2017), then drop to 2.2% next year.
Inflation, as measured by CPI, will grow 2.9% this year (after 2.1% last year) and 2.3% in 2019, according to the forecast, as oil prices rise this year before falling. Real personal consumption expenditures will drop to 2.2% this year from 2.8% last year, and remain at 2.2% next year, the median results suggest.
The unemployment rate is expected to be 3.8% this year and 3.9% in 2019.
“Treasury rates are anticipated to move up this year; both rates are predicted to continue increasing in 2019,” the survey said. “Oil prices are forecasted to increase to $69 per barrel by the end of 2018 and then fall to $66 per barrel by the end of 2019. The trade-weighted U.S. dollar is predicted to decrease 0.5% this year and edge up 0.3% next year.”