Fed median projection for end 2025 Federal funds rate remains at 3.9%

The Federal Reserve released the economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy, sometimes referred to as the “dot plot,” which shows that the group’s median forecast now calls for a Fed funds rate of 3.9% at the end of 2025, unchanged from the prior projection from December. The “central tendency” of the group, which excludes the three highest and three lowest projections for each variable in each year, shows the projected Federal funds rate for the end of 2025 at 3.9%-4.4% vs. 3.6%-4.1% in December. The group’s median forecast now calls for a Fed funds rate of 3.4% at the end of 2026, unchanged from prior view of 3.4% at the end of that year. For 2027-end, the median forecast calls for Fed funds rate of 3.1%, unchanged from prior view, and Longer-Run Fed Funds projection also remains unchanged at 3.0%.