Fed officials expect higher unemployment rates by year end, signal stimulus easing, interest hike

Fed officials on Wednesday downgraded their forecast for the U.S. unemployment rates, with expectations that inflation and joblessness will rise before the end of the year.

This is the first time closely watched estimates have been directly impacted by the increase in COVID-19 numbers as a resukt of the virus's highly contagious Delta variant. 

"The progress of the economy continues to depend on the course of the virus and risks to the economic outlook remain, " Federal Reserve Chair Jerome Powell said during press conference. He also said the COVID surge is causing "significant hardship and loss, and slowing the economic recovery."

As a result of these expectations, the Fed is unlikely to increase interest rates this month to stop inflation. 

The median unemployment rate is expected to rise to around 4.8%, according to Powell.