(Bloomberg) -- The Federal Reserve isn’t buyingPresident Donald Trump’s argument that his tax cut package will lead to a significantlystronger, sustainable expansion of the economy.

While the central bank would welcome such a development,outgoing Fed Chair Janet Yellen suggested on Wednesday that policymakers generally see the plan as having a modest and mostly short-termimpact.

“It’s not a gigantic increase in growth,” she told a pressconference after the Fed raised its target for short-term interestrates for the third time this year.

Policy makers boosted their economic forecast in 2018 to 2.5percent from 2.1 percent in September as they increasingly factoredthe effects on the tax package into their outlooks.

Yet they left their estimate of the long-run growth rate of theeconomy unchanged at 1.8 percent, according to the medianprojection of policy makers released on Wednesday.

That’s in line with its pace in recent years but well below theroughly 3 percent level the Trump administration has penciled intoits budget for the government.

Even as Yellen was sounding cautious about the tax cut’s impact,Trump was across town at the White House trumpeting its benefits tothe point of seemingly suggesting that growth could hit 4 percentor even more.

“We stand on the verge of a new economic miracle,” he said.

Asked about the president’s remarks, Yellen twice said that itwould be a “challenge” to achieve such a rate.

No game changer

“The Fed doesn’t see the tax package as a game changer in termsof growth -- just some modest upside, concentrated mostly in 2018,”Roberto Perli, a former central bank official who is now a partnerat Cornerstone Macro LLC in Washington.

Policy makers do see the faster growth leading to lowerunemployment, with joblessness projected to fall to 3.9 percent bythe end of next year, from 4.1 percent now.

While the labor market is expected to stay strong, the pace ofpayroll gains is likely to moderate over time as the central banksgradually raises interest rates, Yellen said.

Officials penciled in three interest rate hikes for next year --the same amount that they foresaw in September -- and furthergradual increases thereafter.

Yellen, who is due to step down as chair on Feb. 3, is leavingher designated successor -- Fed Governor Jerome Powell -- with aneconomy she said is “performing well,” and a job market “in thevicinity of full employment.”

“I feel very pleased when I hear anecdotes from firms that tellme they’re having a hard time finding workers” and are hiringpeople with lesser skills and providing them with training, shesaid.

‘I feel good’

“I feel good about the economic outlook,” Yellen declared. “Therisks are balanced, and there’s less to lose sleep about now thanhas been true for quite some time.”

She played down fears that surging prices for stocks and thecryptocurrency bitcoin posed a danger to the financial system andthe economy.

“When we look at other indicators of financial stability risks,there’s nothing flashing red there or possibly even orange,” shesaid, noting that “bitcoin at this time plays a very small role inthe payment system.”

Yellen though did express some unease about the Fed’s continuedfailure to lift inflation to its 2 percent goal, even while arguingthat that the surprising softness of price pressures this year wasmainly due to transitory factors.

“Our understanding of the forces driving inflation isimperfect,” she said.

And she stressed the importance of the Fed hitting itsobjective.

“‘We are prepared to adjust monetary policy as needed to achieveour inflation and employment objectives over the medium-term,” shesaid.

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