Following the Federal Reserve’s meeting on Wednesday there was a lot of speculation about how long the Fed will continue its Quantitative Easing (QE) program. Since the Fed’s statements are cryptic, I prefer to look at its economic projections. In this article, I discuss how the Fed’s current GDP and unemployment projections compare to the projections at previous meetings. At almost every meeting since 2011, the Fed has lowered its forecasts. Before a “Fed exit” is on the table, we probably need to see GDP projections increase from meeting to meeting. That may be far off and QE Infinity looks likely to be around for a while. Despite the Fed’s efforts, US Treasury bond yields are rising and prices falling (as measured by the iShares Barclays 20+ Yr Treasury Bond ETF (TLT)), but the big move in the bond market may happen when the Fed’s GDP projections begin to change directions.

The Fed’s Projections For GDP Growth & Unemployment

The following charts aggregate the projections for GDP growth and unemployment (as released after Fed meetings). The Fed releases its data in the form of a broad range of projections and a narrower “central tendency.” The figures below represent the midpoint of the central tendency for each period.

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