(Reuters) - U.S. economic growth is expected to pick up next year, driving down the unemployment rate, but inflation is seen slowing slightly, according a survey published Monday by the Federal Reserve Bank of Chicago.
The forecasts, from manufacturers, bankers, analysts and others participating in the regional Fed bank's annual outlook symposium last week, also point to borrowing costs rising ever so gradually. The yield on the 1-year Treasury bill is seen rising to 0.47 percent by the fourth quarter of 2015, from 0.11 percent this quarter.
The Fed has kept interest rates near zero for six years now, and an improving labor market and signs of generally stronger economic growth are bolstering expectations for it to begin raising rates some time next year. The survey results are in line with that view.
Fed officials are watching inflation carefully, and for the most part have stuck to the view that it will rise slowly back toward the Fed's 2-percent goal in coming years.
The Chicago Fed survey results give little comfort on that score, with participants forecasting growth in the consumer price index to slip to 1.7 percent in the fourth quarter of 2015, from an estimated 1.8 percent this quarter. Notably, they also see the price of oil firming slightly over the same period.
Survey participants see the yield on the 10-year Treasury note, rising to 3 percent a year from now.
The survey was completed on Dec. 5, before the Friday release of a stronger-than-forecast November jobs report that boosted expectations the Fed will start raising rates in the middle of next year. Survey participants said they expect the unemployment rate to fall to 5.6 percent by the fourth quarter of 2015, from 5.8 percent now.
The U.S. economy was seen growing 2.7 percent, faster than the nation's historical average.
(Reporting by Ann Saphir; Editing by Chizu Nomiyama)