Chicago Fed Letter
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This Chicago Fed Letter investigates the evolution of longer-run economic projections made by participants of the Federal Reserve’s monetary policy committee, the Federal Open Market Committee (FOMC), in its Summary of Economic Projections (SEP), and by the private sector. Over the past few years, the FOMC’s longer-run projections for economic growth, unemployment, and the federal funds rate have fallen quite dramatically. We verify that these views are shared by the private sector and show that the declines are not unprecedented in magnitude, but the projections have reached historical lows. We point to some reasons for these developments and touch on some implications for monetary policy.
Prices for key agricultural products have fallen from their peaks in recent years, while input costs have not fallen as much. Consequently, many farm operations in the Midwest have had lower revenues and thinner profit margins—and some even losses. On November 29, 2016, the Federal Reserve Bank of Chicago held a conference to examine the agricultural downturn in the Midwest and discuss future directions for farming.
In this Chicago Fed Letter, we illustrate how regulators have used rule-based and principle-based approaches to set the minimum level of reserves and capital for insurers. We use examples to show the trend toward more principle-based regulation.
According to participants in the Chicago Fed’s annual Economic Outlook Symposium, the U.S. economy is forecasted to grow at a pace slightly above average in 2017, with inflation moving higher and the unemployment rate remaining low.