Overoptimistic Fed strains credibility...

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By Lindsay Dunsmuir WASHINGTON (Reuters) - The economic projections of Federal Reserve policymakers released on Wednesday anticipate U.S. economic growth at 2.4 percent next year and a rebound in inflation to 2 percent by 2018. The new projections came as the Fed carried out its first rate hike in almost a decade and set out a path for rate rises for 2016 that projected a 1.375 percent year-end federal funds rate. An analysis of the rate-setters' year-ahead projections over the past five years shows they have generally overestimated real GDP growth and inflation, while underestimating improvement in the unemployment rate.

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