Fed Officials Raise Forecast Target Rates for Next 2 Years

Federal Reserve officials predicted their target interest rate will be 1.13 percent at the end of 2015 and 2.5 percent a year later, higher than previously forecast. They lowered their long-run estimated rate, reflecting a slower growth rate for the U.S. economy.

Most Federal Open Market Committee participants reiterated their view that the Fed will refrain from raising its benchmark rate until 2015. The median of today’s 16 forecasts compares with policy makers’ outlook in March, when they estimated the rate would rise to 1 percent by the end of next year and 2.25 percent at the end of 2016.