[VT | Philadelphia | Sept. 17, 2025] FOMC members’ and Federal Reserve Bank presidents’ expectations for key economic indicators, including real GDP growth, the unemployment rate, and personal consumption expenditures (PCE) inflation, from 2025 through 2028 and over the longer run. The projections include median values, central tendencies, and full ranges.
Economic Growth
FOMC participants project real GDP growth at a median of 1.6% in 2025, rising to 1.8% in 2026, 1.9% in 2027, and 1.8% in 2028, with a longer-run median of 1.8%. The central tendency for 2025–2028 is 1.4%–2.0%, with the longer-run range at 1.7%–2.0%. Compared with June projections, the 2025 GDP growth forecast has increased slightly from 1.4%, and longer-term expectations have been revised upward.
Unemployment Rate
The median unemployment rate is expected at 4.5% in 2025, declining gradually to 4.2% by 2028, with a longer-run median of 4.2%. Central tendency ranges suggest unemployment could remain between 4.0% and 4.5% in the near term, indicating a relatively stable labor market.
Inflation and Core Inflation
The PCE price index is projected at a median of 3.0% in 2025, falling to 2.0% by 2028, with a longer-run median of 2.0%. Core PCE inflation (excluding food and energy) is projected at 3.1% in 2025, decreasing to 2.0% in 2028. Central tendencies suggest inflation is likely to remain around 2.0%–3.0% across these years.
Federal Funds Rate
Based on participants’ assessments of an appropriate policy path, the median federal funds rate is expected at 3.6% in 2025, declining to 3.1% by 2027–2028, with a longer-run median of 3.0%. Central tendency ranges indicate the rate could vary between 2.9% and 4.1%. Compared with June projections, medium-term rate expectations are slightly lower.
Uncertainty and Risks
The report includes an analysis of uncertainty and risks. Historical forecast errors suggest that over the next four years, GDP growth could deviate by ±1.4 to ±2.3 percentage points, unemployment by ±0.5 to ±2.1 percentage points, inflation by ±1.0 to ±1.7 percentage points, and short-term interest rates by ±0.5 to ±2.8 percentage points. FOMC participants also provided qualitative assessments of risks to these variables, indicating whether outcomes are more likely to tilt above, below, or remain balanced around projections.
The latest projections indicate moderate economic growth, stable labor market conditions, and inflation near the longer-run target, while monetary policy rates are expected to remain at a moderate level to support economic stability. The report provides insight into the Committee’s view of the appropriate policy path and highlights the uncertainty and potential risks surrounding these projections.
