The “Fed’s Projection of the Midpoint Target Range or Target Level” represents the individual Fed Participants judgment of the midpoint of the appropriate target range for the Federal Funds Rate or appropriate target level for the Federal Funds Rate at the end of the specified calendar year (rounded to the nearest 1/8 %).
The below graph shows the skew of the surveyed results along with the expected average for the year. This is different than in prior surveys. The difference is it seems to takes the low/high target range of participants and calculates the Midpoint (rounded to the nearest 1/8%). . In prior survey’s it was simply where they thought the target rate would be at the end of the year. So if the target range for 2014 is 0% to 0.25%, the number would be 0.125%.
In 2015, the average of the survey responses is 1.27%. In 2016, the average is 2.68% and the longer run average is now at 3.544%. As a point of comparison, in June the average for 2015 was 1.2%, the average for 2016 was 2.53%. They did not have an average for 2017 last month. The longer run projection (not shown in the chart below) showed the survey average this month at 3.79%. This is very similar to the estimate from June of 3.78%.
So overall, the committee upped their expectations for rates by 7 basis points in 2015 and 15 basis points in 2016.
The Survey of the Midpoint of the Target Range or Target Fed Funds Level.
