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FOMC Participants Perceive Higher Growth, Inflation Risks Vs December

FED

In addition to the stronger economic forecasts in the projections, the diffusion indices of FOMC participants' risk weightings have shifted in a similar direction.

  • The diffusion of responses (those saying risks weighted to upside minus those saying risks weighted to downside) points to a positive net risk perception of GDP growth for the first time since mid-2021, with the unemployment rate risks only marginally positive (ie less concern about unemployment rate rising).
  • Core PCE and PCE inflation risks were seen as still being to the upside, and marginally more so versus December's projections - stalling progress in that area.
  • Separately, "uncertainty" over all of those variables was seen to have fallen vs December's meeting, and are at the lowest since the pandemic, continuing the downward trend.

Source: Federal Reserve

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