The Federal Reserve’s latest dot plot, released alongside Wednesday’s rate decision, signaled a more aggressive easing path for 2025. Policymakers now expect two additional rate cuts next year, on top of the quarter-point reduction announced this week.
That trajectory would bring the federal funds rate down to a range of 3.50% to 3.75% by the end of 2025, compared with the earlier June forecast that saw the benchmark ending the year between 3.75% and 4.00%.
On Wednesday, the Fed cut rates by 25 basis points to a range of 4.00% to 4.25%, its first reduction of 2025. Officials also raised their GDP growth forecast for 2025, projecting a 1.6% expansion, up from earlier estimates of 1.5%.
The updated projections reflect the Fed’s balancing act—providing relief from higher borrowing costs while acknowledging a still-resilient U.S. economy.
