What do the policymakers forecast?

The policymakers provide forecasts for economic growth, unemployment, and inflation. More specifically, the numbers that they provide for each of the years in their forecast are: the percent change in gross domestic product adjusted for inflation (real GDP), the unemployment rate, the percent change in the price index for personal consumption expenditures (PCE inflation), and the percent change in the price index for PCE excluding food and energy (core PCE inflation). Changes in real GDP and prices are measured from the fourth quarter of one year to the fourth quarter of the next. The unemployment rate is the average civilian unemployment rate in the fourth quarter of a year.

Beginning in January 2012, the economic projections also include information about policymakers' projections of appropriate monetary policy. Specifically, the projections include information about policymakers' projections of the appropriate level of the target federal funds rate--that is, the path that each policymaker judges likely to be most consistent with the Federal Reserve's statutory mandate to promote maximum employment and stable prices--in the fourth quarter of the current year and the next few calendar years, and over the longer run; the projections also report policymakers' current projections of the likely timing of the first increase in the target rate given their projections of future economic conditions. Additionally, an accompanying narrative describes the key factors underlying those assessments as well as qualitative information regarding policymakers’ expectations for the Federal Reserve's balance sheet.