The figure also shows the central tendency of the unemployment projections that my FOMC colleagues and I made at our January meeting: Those projections reflect our assessments of the economic outlook given our own individual judgments about the appropriate path of monetary policy. As in the Blue Chip consensus outlook, FOMC participants’ projections indicate that unemployment will decline gradually from current levels.
Included in the figure as well is the central tendency of FOMC participants’ estimates of the longer-run normal unemployment rate, which ranges from 5.2 percent to 6 percent. The unemployment rate is expected to remain well above its longer-run normal value over the next several years. As you know, economic forecasts always entail considerable uncertainty.