US Federal Reserve expects two more rate hikes this year as the central bank moved up its terminal rate estimate, according to projection materials released Wednesday.
The terminal rate, the peak spot where the federal funds rate is expected to climb before being trimmed, was revised up to 5.6%, from the previous projection of 5.1% made in March.
This suggests that the Fed could make two interest rate increases by 25 basis points each, carrying the federal funds rate to the range between 5.5% to 5.75% in its remaining meetings this year.
The Fed's next two-day meetings will conclude on July 26, followed by Sept. 20, Nov. 1, and finally on Dec. 13.
The central bank, in addition, revised its 2023 growth forecast for the American economy to 1%, up from the previous estimate of 0.4% made in March.
The personal consumption expenditures (PCE) price index, the central bank's preferred inflation indicator, was slightly revised down to 3.2%, from 3.3%, for this year.
Core PCE inflation, on the other hand, was revised up to 3.9% for 2023, from the 3.6% forecast made three months ago.
The unemployment rate is estimated to ease to 4.1% in 2023, down from an expectation of 4.5% in March, according to forecasts.
