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Federal Reserve Lowers Interest Rate Outlook to 3%–3.6% Range

Updated dot plot forecasts show a median federal funds rate of 3.6% in 2025, gradually declining to 3% in the long term.

Summary

The Federal Reserve's latest dot plot indicates reduced future interest rate expectations, projecting a range of 3% to 3.6%. The median federal funds rate forecast is 3.6% for 2025, 3.4% for 2026, 3.1% for 2027, and 3% in the long term.

Terms & Concepts
  • Dot Plot: A chart released by the Federal Reserve showing policymakers’ projections for future interest rates over the short, medium, and long term.
  • Federal Funds Rate: The interest rate at which depository institutions lend reserve balances to other institutions overnight, influencing overall U.S. borrowing costs.