Fed Says Long-Term Inflation Goal Is 2 Percent

(MarketWatch) - The Federal Open Market Committee said Wednesday its long-term inflation goal is two percent, as measured by the annual change in the price index for personal consumption expenditures (PCE).

That's the most explicit the Fed has been in terms of setting an inflation target.

Eleven of the 17 Federal Open Market Committee participants said they believed a rate hike would not be appropriate before 2014, according to the first-ever rate forecasts published Wednesday.

The Fed also forecasts GDP growth between 2.2 percent and 2.7 percent this year, an unemployment rate between 8.2 percent and 8.5 percent and PCE inflation between 1.4 percent and 1.8 percent.

The growth forecast is down from November levels, as are the jobless and inflation views. The Fed sees longer-term rates reaching between four percent and 4.5 percent.

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