The dot plot from December 2024 showed:
The NEW projection for 2025 in March 2025 projects the Fed fund at end of 2025 unchanged at 3.9%. For 2026, they project 3.4% and 3.1 in 2027. Those are unchanged from December.
1) 2025 GDP
In December, the median forecast for GDP bumped up to 2.1% from 2.0% for this year’s growth. The projection is now 1.7% in 2025 (lower growth). In 2026 they see GDP also lower at 1.8% from 2.0%
2) 2025 PCE inflation
In December, the PCE inflation forecast rose to 2.5% from 2.1% . The projection is now 2.7% for the headline for 2025 up 0.2%. For the core, the PCE moved UP from 2.5% to 2.8% at the end of 2025, up 0.3%.
3) 2026 PCE inflation
For 2026, in December the core PCE rose to 2.1%. IT is now seen at 2.2%, up 0.1%. For the core in 2026, they see the rate remaining at 2.2%
4) The unemployment rate
The unemployment rate in the February non-farm payrolls report was 4.1% compared to 4.0% expected. IN the December the FOMC saw end of year unemployment at 4.3%. they see it now at 4.4%. The 2026 remains unchanged at 4.3%.
This article was written by Greg Michalowski at www.forexlive.com.