FOMC Projections: GDP Revised Down, Inflation Revised Up

Statement here. Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET. Here are the projections. In December, the FOMC participants’ midpoint of the target level for the federal funds rate was around 3.875% at the end of 2025 (3.6%-4.1%) and the long run range was 2.8% to 3.6%. The FOMC participants’ midpoint of the target range is now at 4.0% at the end of 2025 (3.9%-4.4%) and the long run range is 2.6% to 3.6%. It appears growth slower than expected in Q1 2025, and 2025 GDP growth was revised down. GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP1 Projection Date202520262027 Mar 20251.5 to 1.91.6 to 1.91.6 to 2.0Dec 20241.8 to 2.21.9 to 2.11.8 to 2.0 1 Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated. The unemployment rate was at 4.1% in February. Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate2 Projection Date202520262027 Mar 20254.3 to 4.44.2 to 4.54.1 to 4.4Dec 20244.2 to 4.54.1 to 4.44.0 to 4.4 2 Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated. As of January 2025, PCE inflation increased 2.5 percent year-over-year (YoY). The projections for Q4 2025 PCE inflation were revised up. Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation1 Projection Date202520262027 Mar 20252.6 to 2.92.1 to 2.32.0 to 2.1Dec 20242.3 to 2.62.0-2.22.0 PCE core inflation increased 2.6 percent YoY in January and is expected to be up 2.7 percent YoY in February. The projections for core PCE inflation Q4 2025 were revised up. Core Inflation projections of Federal Reserve Governors and Reserve Bank presidents, Core Inflation1 Projection Date202520262027 Mar 20252.7 to 3.02.1 to 2.42.0 to 2.1Dec 20242.5 to 2.72.0-2.32.0

Mar 20, 2025 - 00:05

Statement here.

Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET.

Here are the projections.

In December, the FOMC participants’ midpoint of the target level for the federal funds rate was around 3.875% at the end of 2025 (3.6%-4.1%) and the long run range was 2.8% to 3.6%. The FOMC participants’ midpoint of the target range is now at 4.0% at the end of 2025 (3.9%-4.4%) and the long run range is 2.6% to 3.6%.

It appears growth slower than expected in Q1 2025, and 2025 GDP growth was revised down.

GDP projections of Federal Reserve Governors and Reserve Bank presidents, Change in Real GDP¹
Projection Date	2025	2026	2027
Mar 2025	1.5 to 1.9	1.6 to 1.9	1.6 to 2.0
Dec 2024	1.8 to 2.2	1.9 to 2.1	1.8 to 2.0

¹ Projections of change in real GDP and inflation are from the fourth quarter of the previous year to the fourth quarter of the year indicated.

The unemployment rate was at 4.1% in February.

Unemployment projections of Federal Reserve Governors and Reserve Bank presidents, Unemployment Rate²
Projection Date	2025	2026	2027
Mar 2025	4.3 to 4.4	4.2 to 4.5	4.1 to 4.4
Dec 2024	4.2 to 4.5	4.1 to 4.4	4.0 to 4.4

² Projections for the unemployment rate are for the average civilian unemployment rate in the fourth quarter of the year indicated.

As of January 2025, PCE inflation increased 2.5 percent year-over-year (YoY). The projections for Q4 2025 PCE inflation were revised up.

Inflation projections of Federal Reserve Governors and Reserve Bank presidents, PCE Inflation¹
Projection Date	2025	2026	2027
Mar 2025	2.6 to 2.9	2.1 to 2.3	2.0 to 2.1
Dec 2024	2.3 to 2.6	2.0-2.2	2.0

PCE core inflation increased 2.6 percent YoY in January and is expected to be up 2.7 percent YoY in February. The projections for core PCE inflation Q4 2025 were revised up.