sep · September 16, 2025
Summary of Economic Projections
For release at 2:00 p.m., EDT, September 17, 2025
Summary of Economic Projections
In conjunction with the Federal Open Market Committee (FOMC) meeting held on
September 16–17, 2025, meeting participants submitted their projections of the most
likely outcomes for real gross domestic product (GDP) growth, the unemployment
rate, and inflation for each year from 2025 to 2028 and over the longer run. Each
participant’sprojectionswerebasedoninformationavailableatthetimeofthemeeting,
together with her or his assessment of appropriate monetary policy—including a path
for the federal funds rate and its longer-run value—and assumptions about other
factors likely to affect economic outcomes. The longer-run projections represent each
participant’s assessment of the value to which each variable would be expected to
converge, over time, under appropriate monetary policy and in the absence of further
shocks to the economy. “Appropriate monetary policy” is defined as the future path of
policy that each participant deems most likely to foster outcomes for economic activity
and inflation that best satisfy his or her individual interpretation of the statutory
mandate to promote maximum employment and price stability.
Page 1 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Table 1. Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents,
under their individual assumptions of projected appropriate monetary policy, September 2025
Percent
Median1 CentralTendency2 Range3
Variable
2025 2026 2027 2028 Longer 2025 2026 2027 2028 Longer 2025 2026 2027 2028 Longer
run run run
ChangeinrealGDP 1.6 1.8 1.9 1.8 1.8 1.4–1.7 1.7–2.1 1.8–2.0 1.7–2.0 1.7–2.0 1.3–2.0 1.5–2.6 1.7–2.7 1.6–2.6 1.7–2.5
Juneprojection 1.4 1.6 1.8 1.8 1.2–1.5 1.5–1.8 1.7–2.0 1.7–2.0 1.1–2.1 0.6–2.5 0.6–2.5 1.5–2.5
Unemploymentrate 4.5 4.4 4.3 4.2 4.2 4.4–4.5 4.4–4.5 4.2–4.4 4.0–4.3 4.0–4.3 4.2–4.6 4.0–4.6 4.0–4.5 4.0–4.5 3.8–4.5
Juneprojection 4.5 4.5 4.4 4.2 4.4–4.5 4.3–4.6 4.2–4.6 4.0–4.3 4.3–4.6 4.3–4.7 4.0–4.7 3.5–4.5
PCEinflation 3.0 2.6 2.1 2.0 2.0 2.9–3.0 2.4–2.7 2.0–2.2 2.0 2.0 2.5–3.2 2.2–2.8 2.0–2.4 2.0 2.0
Juneprojection 3.0 2.4 2.1 2.0 2.8–3.2 2.3–2.6 2.0–2.2 2.0 2.5–3.3 2.1–3.1 2.0–2.8 2.0
CorePCEinflation4 3.1 2.6 2.1 2.0 3.0–3.2 2.5–2.7 2.0–2.2 2.0 2.7–3.4 2.2–2.9 2.0–2.4 2.0–2.2
Juneprojection 3.1 2.4 2.1 2.9–3.4 2.3–2.7 2.0–2.2 2.5–3.5 2.1–3.2 2.0–2.9
Memo: Projected
appropriatepolicypath
Federalfundsrate 3.6 3.4 3.1 3.1 3.0 3.6–4.1 2.9–3.6 2.9–3.6 2.8–3.6 2.8–3.5 2.9–4.4 2.6–3.9 2.4–3.9 2.6–3.9 2.6–3.9
Juneprojection 3.9 3.6 3.4 3.0 3.9–4.4 3.1–3.9 2.9–3.6 2.6–3.6 3.6–4.4 2.6–4.1 2.6–3.9 2.5–3.9
Note: Projectionsofchangeinrealgrossdomesticproduct(GDP)andprojectionsforbothmeasuresofinflationarepercentchangesfromthefourthquarterof
thepreviousyeartothefourthquarteroftheyearindicated. PCEinflationandcorePCEinflationarethepercentageratesofchangein,respectively,thepriceindex
forpersonalconsumptionexpenditures(PCE)andthepriceindexforPCEexcludingfoodandenergy. Projectionsfortheunemploymentratearefortheaverage
civilianunemploymentrateinthefourthquarteroftheyearindicated. Eachparticipant’sprojectionsarebasedonhisorherassessmentofappropriatemonetary
policy. Longer-runprojectionsrepresenteachparticipant’sassessmentoftheratetowhicheachvariablewouldbeexpectedtoconvergeunderappropriatemonetary
policyandintheabsenceoffurthershockstotheeconomy. Theprojectionsforthefederalfundsratearethevalueofthemidpointoftheprojectedappropriate
targetrangeforthefederalfundsrateortheprojectedappropriatetargetlevelforthefederalfundsrateattheendofthespecifiedcalendaryearoroverthelonger
run. TheJuneprojectionsweremadeinconjunctionwiththemeetingoftheFederalOpenMarketCommitteeonJune17–18,2025.
1. Foreachperiod,themedianisthemiddleprojectionwhentheprojectionsarearrangedfromlowesttohighest. Whenthenumberofprojectionsiseven,the
medianistheaverageofthetwomiddleprojections.
2. Thecentraltendencyexcludesthethreehighestandthreelowestprojectionsforeachvariableineachyear.
3. Therangeforavariableinagivenyearincludesallparticipants’projections,fromlowesttohighest,forthatvariableinthatyear.
4. Longer-runprojectionsforcorePCEinflationarenotcollected.
Page 2 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 1. Medians, central tendencies, and ranges of economic projections, 2025–28 and over the longer run
Percent
Change in real GDP
6
5
4
Actual 3
2
1
Median of projections 0
Central tendency −1
Range of projections
−2
2020 2021 2022 2023 2024 2025 2026 2027 2028 Longer run
Percent
Unemployment rate
7
6
5
4
3
2
1
2020 2021 2022 2023 2024 2025 2026 2027 2028 Longer run
Percent
PCE inflation
7
6
5
4
3
2
1
2020 2021 2022 2023 2024 2025 2026 2027 2028 Longer run
Percent
Core PCE inflation
7
6
5
4
3
2
1
2020 2021 2022 2023 2024 2025 2026 2027 2028 Longer run
Note: Definitionsofvariablesandotherexplanationsareinthenotestotable1. Thedatafortheactualvaluesof
thevariablesareannual.
Page 3 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 2. FOMC participants’ assessments of appropriate monetary policy: Midpoint of target range
or target level for the federal funds rate
Percent
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2025 2026 2027 2028 Longer run
Note: Each shaded circle indicates the value (rounded to the nearest 1/8 percentage point) of an individual
participant’sjudgmentofthemidpointoftheappropriatetargetrangeforthefederalfundsrateortheappropriate
targetlevelforthefederalfundsrateattheendofthespecifiedcalendaryearoroverthelongerrun.
Page 4 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure3.A.Distributionofparticipants’projectionsforthechangeinrealGDP,2025–28andoverthelongerrun
Number of Participants
2025
20
September projections 18
June projections 16
14
12
10
8
6
4
2
0.4− 0.6− 0.8− 1.0− 1.2− 1.4− 1.6− 1.8− 2.0− 2.2− 2.4− 2.6−
0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7
Percent range
Number of Participants
2026
20
18
16
14
12
10
8
6
4
2
0.4− 0.6− 0.8− 1.0− 1.2− 1.4− 1.6− 1.8− 2.0− 2.2− 2.4− 2.6−
0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7
Percent range
Number of Participants
2027
20
18
16
14
12
10
8
6
4
2
0.4− 0.6− 0.8− 1.0− 1.2− 1.4− 1.6− 1.8− 2.0− 2.2− 2.4− 2.6−
0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7
Percent range
Number of Participants
2028
20
18
16
14
12
10
8
6
4
2
0.4− 0.6− 0.8− 1.0− 1.2− 1.4− 1.6− 1.8− 2.0− 2.2− 2.4− 2.6−
0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7
Percent range
Number of Participants
Longer run
20
18
16
14
12
10
8
6
4
2
0.4− 0.6− 0.8− 1.0− 1.2− 1.4− 1.6− 1.8− 2.0− 2.2− 2.4− 2.6−
0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7
Percent range
Note: Definitionsofvariablesandotherexplanationsareinthenotestotable1.
Page 5 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure3.B.Distributionofparticipants’projectionsfortheunemploymentrate,2025–28andoverthelongerrun
Number of Participants
2025
20
September projections 18
June projections 16
14
12
10
8
6
4
2
3.2− 3.4− 3.6− 3.8− 4.0− 4.2− 4.4− 4.6−
3.3 3.5 3.7 3.9 4.1 4.3 4.5 4.7
Percent range
Number of Participants
2026
20
18
16
14
12
10
8
6
4
2
3.2− 3.4− 3.6− 3.8− 4.0− 4.2− 4.4− 4.6−
3.3 3.5 3.7 3.9 4.1 4.3 4.5 4.7
Percent range
Number of Participants
2027
20
18
16
14
12
10
8
6
4
2
3.2− 3.4− 3.6− 3.8− 4.0− 4.2− 4.4− 4.6−
3.3 3.5 3.7 3.9 4.1 4.3 4.5 4.7
Percent range
Number of Participants
2028
20
18
16
14
12
10
8
6
4
2
3.2− 3.4− 3.6− 3.8− 4.0− 4.2− 4.4− 4.6−
3.3 3.5 3.7 3.9 4.1 4.3 4.5 4.7
Percent range
Number of Participants
Longer run
20
18
16
14
12
10
8
6
4
2
3.2− 3.4− 3.6− 3.8− 4.0− 4.2− 4.4− 4.6−
3.3 3.5 3.7 3.9 4.1 4.3 4.5 4.7
Percent range
Note: Definitionsofvariablesandotherexplanationsareinthenotestotable1.
Page 6 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure3.C.Distributionofparticipants’projectionsforPCEinflation,2025–28andoverthelongerrun
Number of Participants
2025
20
September projections 18
June projections 16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4
Percent range
Number of Participants
2026
20
18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4
Percent range
Number of Participants
2027
20
18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4
Percent range
Number of Participants
2028
20
18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4
Percent range
Number of Participants
Longer run
20
18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4
Percent range
Note: Definitionsofvariablesandotherexplanationsareinthenotestotable1.
Page 7 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure3.D.Distributionofparticipants’projectionsforcorePCEinflation,2025–28
Number of Participants
2025
20
September projections
June projections 18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3− 3.5−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6
Percent range
Number of Participants
2026
20
18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3− 3.5−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6
Percent range
Number of Participants
2027
20
18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3− 3.5−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6
Percent range
Number of Participants
2028
20
18
16
14
12
10
8
6
4
2
1.7− 1.9− 2.1− 2.3− 2.5− 2.7− 2.9− 3.1− 3.3− 3.5−
1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6
Percent range
Note: Definitionsofvariablesandotherexplanationsareinthenotestotable1.
Page 8 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure3.E.Distributionofparticipants’judgmentsofthemidpointoftheappropriatetargetrangeforthe
federalfundsrateortheappropriatetargetlevelforthefederalfundsrate,2025–28andoverthelongerrun
Number of Participants
2025
20
September projections 18
June projections 16
14
12
10
8
6
4
2
2.13− 2.38− 2.63− 2.88− 3.13− 3.38− 3.63− 3.88− 4.13− 4.38−
2.37 2.62 2.87 3.12 3.37 3.62 3.87 4.12 4.37 4.62
Percent range
Number of Participants
2026
20
18
16
14
12
10
8
6
4
2
2.13− 2.38− 2.63− 2.88− 3.13− 3.38− 3.63− 3.88− 4.13− 4.38−
2.37 2.62 2.87 3.12 3.37 3.62 3.87 4.12 4.37 4.62
Percent range
Number of Participants
2027
20
18
16
14
12
10
8
6
4
2
2.13− 2.38− 2.63− 2.88− 3.13− 3.38− 3.63− 3.88− 4.13− 4.38−
2.37 2.62 2.87 3.12 3.37 3.62 3.87 4.12 4.37 4.62
Percent range
Number of Participants
2028
20
18
16
14
12
10
8
6
4
2
2.13− 2.38− 2.63− 2.88− 3.13− 3.38− 3.63− 3.88− 4.13− 4.38−
2.37 2.62 2.87 3.12 3.37 3.62 3.87 4.12 4.37 4.62
Percent range
Number of Participants
Longer run
20
18
16
14
12
10
8
6
4
2
2.13− 2.38− 2.63− 2.88− 3.13− 3.38− 3.63− 3.88− 4.13− 4.38−
2.37 2.62 2.87 3.12 3.37 3.62 3.87 4.12 4.37 4.62
Percent range
Note: Definitionsofvariablesandotherexplanationsareinthenotestotable1.
Page 9 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 4.A. Uncertainty and risks in projections of GDP growth
Median projection and confidence interval based on historical forecast errors
Percent
Change in real GDP
6
5
4
3
2
Actual 1
0
−1
−2
Median of projections
70% confidence interval −3
2020 2021 2022 2023 2024 2025 2026 2027 2028
FOMC participants’ assessments of uncertainty and risks around their economic projections
Number of Participants Number of Participants
Uncertainty about GDP growth Risks to GDP growth
20 20
September projections 18 September projections 18
June projections 16 June projections 16
14 14
12 12
10 10
8 8
6 6
4 4
2 2
Lower Broadly Higher Weighted to Broadly Weighted to
similar downside balanced upside
Note: Theblueandredlinesinthetoppanelshowactualvaluesandmedianprojectedvalues,respectively,ofthe
percent change in real gross domestic product (GDP) from the fourth quarter of the previous year to the fourth
quarteroftheyearindicated. Theconfidenceintervalaroundthemedianprojectedvaluesisassumedtobesymmetric
andisbasedonrootmeansquarederrorsofvariousprivateandgovernmentforecastsmadeovertheprevious20years;
more information about these data is available in table 2. Because current conditions may differ from those that
prevailed, onaverage, overtheprevious20years, thewidthandshapeoftheconfidenceintervalestimatedonthe
basisofthehistoricalforecasterrorsmaynotreflectFOMCparticipants’currentassessmentsoftheuncertaintyand
risks around their projections; these current assessments are summarized in the lower panels. Generally speaking,
participantswhojudgetheuncertaintyabouttheirprojectionsas“broadlysimilar”totheaveragelevelsofthepast20
yearswouldviewthewidthoftheconfidenceintervalshowninthehistoricalfanchartaslargelyconsistentwiththeir
assessmentsoftheuncertaintyabouttheirprojections. Likewise,participantswhojudgetheriskstotheirprojections
as“broadlybalanced”wouldviewtheconfidenceintervalaroundtheirprojectionsasapproximatelysymmetric. For
definitionsofuncertaintyandrisksineconomicprojections,seethebox“ForecastUncertainty.”
Page 10 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 4.B. Uncertainty and risks in projections of the unemployment rate
Median projection and confidence interval based on historical forecast errors
Percent
Unemployment rate
7
6
Actual 5
4
3
2
Median of projections 1
70% confidence interval
2020 2021 2022 2023 2024 2025 2026 2027 2028
FOMC participants’ assessments of uncertainty and risks around their economic projections
Number of Participants Number of Participants
Uncertainty about the unemployment rate Risks to the unemployment rate
20 20
September projections 18 September projections 18
June projections 16 June projections 16
14 14
12 12
10 10
8 8
6 6
4 4
2 2
Lower Broadly Higher Weighted to Broadly Weighted to
similar downside balanced upside
Note: Theblueandredlinesinthetoppanelshowactualvaluesandmedianprojectedvalues,respectively,ofthe
averagecivilianunemploymentrateinthefourthquarteroftheyearindicated. Theconfidenceintervalaroundthe
medianprojectedvaluesisassumedtobesymmetricandisbasedonrootmeansquarederrorsofvariousprivateand
government forecasts made over the previous 20 years; more information about these data is available in table 2.
Becausecurrentconditionsmaydifferfromthosethatprevailed,onaverage,overtheprevious20years,thewidth
andshapeoftheconfidenceintervalestimatedonthebasisofthehistoricalforecasterrorsmaynotreflectFOMC
participants’currentassessmentsoftheuncertaintyandrisksaroundtheirprojections;thesecurrentassessmentsare
summarizedinthelowerpanels. Generallyspeaking,participantswhojudgetheuncertaintyabouttheirprojectionsas
“broadlysimilar”totheaveragelevelsofthepast20yearswouldviewthewidthoftheconfidenceintervalshowninthe
historicalfanchartaslargelyconsistentwiththeirassessmentsoftheuncertaintyabouttheirprojections. Likewise,
participantswhojudgetheriskstotheirprojectionsas“broadlybalanced”wouldviewtheconfidenceintervalaround
theirprojectionsasapproximatelysymmetric. Fordefinitionsofuncertaintyandrisksineconomicprojections,seethe
box“ForecastUncertainty.”
Page 11 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 4.C. Uncertainty and risks in projections of PCE inflation
Median projection and confidence interval based on historical forecast errors
Percent
PCE inflation
7
6
5
4
Actual 3
2
1
Median of projections
0
70% confidence interval
2020 2021 2022 2023 2024 2025 2026 2027 2028
FOMC participants’ assessments of uncertainty and risks around their economic projections
Number of Participants Number of Participants
Uncertainty about PCE inflation Risks to PCE inflation
20 20
September projections 18 September projections 18
June projections 16 June projections 16
14 14
12 12
10 10
8 8
6 6
4 4
2 2
Lower Broadly Higher Weighted to Broadly Weighted to
similar downside balanced upside
Number of Participants Number of Participants
Uncertainty about core PCE inflation Risks to core PCE inflation
20 20
September projections 18 September projections 18
June projections 16 June projections 16
14 14
12 12
10 10
8 8
6 6
4 4
2 2
Lower Broadly Higher Weighted to Broadly Weighted to
similar downside balanced upside
Note: Theblueandredlinesinthetoppanelshowactualvaluesandmedianprojectedvalues,respectively,of
thepercentchangeinthepriceindexforpersonalconsumptionexpenditures(PCE)fromthefourthquarterofthe
previousyeartothefourthquarteroftheyearindicated. Theconfidenceintervalaroundthemedianprojectedvalues
isassumedtobesymmetricandisbasedonrootmeansquarederrorsofvariousprivateandgovernmentforecasts
madeovertheprevious20years;moreinformationaboutthesedataisavailableintable2. Becausecurrentconditions
maydifferfromthosethatprevailed,onaverage,overtheprevious20years,thewidthandshapeoftheconfidence
intervalestimatedonthebasisofthehistoricalforecasterrorsmaynotreflectFOMCparticipants’currentassessments
oftheuncertaintyandrisksaroundtheirprojections;thesecurrentassessmentsaresummarizedinthelowerpanels.
Generallyspeaking,participantswhojudgetheuncertaintyabouttheirprojectionsas“broadlysimilar”totheaverage
levelsofthepast20yearswouldviewthewidthoftheconfidenceintervalshowninthehistoricalfanchartaslargely
consistentwiththeirassessmentsoftheuncertaintyabouttheirprojections. Likewise,participantswhojudgetherisks
totheirprojectionsas“broadlybalanced”wouldviewtheconfidenceintervalaroundtheirprojectionsasapproximately
symmetric. Fordefinitionsofuncertaintyandrisksineconomicprojections,seethebox“ForecastUncertainty.”
Page 12 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 4.D. Diffusion indexes of participants’ uncertainty assessments
Diffusion Index
Change in real GDP
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Diffusion Index
Unemployment rate
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Diffusion Index
PCE inflation
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Diffusion Index
Core PCE inflation
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Note: For each SEP, participants provided responses to the question “Please indicate your judgment of the
uncertaintyattachedtoyourprojectionsrelativetothelevelsofuncertaintyoverthepast20years.” Eachpointinthe
diffusionindexesrepresentsthenumberofparticipantswhoresponded“Higher”minusthenumberwhoresponded
“Lower,”dividedbythetotalnumberofparticipants. FigureexcludesMarch2020whennoprojectionsweresubmitted.
Page 13 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 4.E. Diffusion indexes of participants’ risk weightings
Diffusion Index
Change in real GDP
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Diffusion Index
Unemployment rate
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Diffusion Index
PCE inflation
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Diffusion Index
Core PCE inflation
1.00
0.75
0.50
0.25
0.00
−0.25
−0.50
−0.75
−1.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Note: ForeachSEP,participantsprovidedresponsestothequestion“Pleaseindicateyourjudgmentoftherisk
weightingaroundyourprojections.” Eachpointinthediffusionindexesrepresentsthenumberofparticipantswho
responded“WeightedtotheUpside”minusthenumberwhoresponded“WeightedtotheDownside,”dividedbythe
totalnumberofparticipants. FigureexcludesMarch2020whennoprojectionsweresubmitted.
Page 14 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Figure 5. Uncertainty and risks in projections of the federal funds rate
Percent
Federal funds rate
Midpoint of target range 7
Median of projections
70% confidence interval*
6
5
4
3
2
1
Actual
0
2020 2021 2022 2023 2024 2025 2026 2027 2028
Note: The blue and red lines are based on actual values and median projected values, respectively, of the
Committee’stargetforthefederalfundsrateattheendoftheyearindicated. Theactualvaluesarethemidpointof
thetargetrange;themedianprojectedvaluesarebasedoneitherthemidpointofthetargetrangeorthetargetlevel.
Theconfidenceintervalaroundthemedianprojectedvaluesisbasedonrootmeansquarederrorsofvariousprivate
andgovernmentforecastsmadeovertheprevious20years. Theconfidenceintervalisnotstrictlyconsistentwiththe
projectionsforthefederalfundsrate,primarilybecausetheseprojectionsarenotforecastsofthelikeliestoutcomesfor
thefederalfundsrate,butratherprojectionsofparticipants’individualassessmentsofappropriatemonetarypolicy.
Still,historicalforecasterrorsprovideabroadsenseoftheuncertaintyaroundthefuturepathofthefederalfundsrate
generatedbytheuncertaintyaboutthemacroeconomicvariablesaswellasadditionaladjustmentstomonetarypolicy
thatmaybeappropriatetooffsettheeffectsofshockstotheeconomy.
Theconfidenceintervalisassumedtobesymmetricexceptwhenitistruncatedatzero-thebottomofthelowest
targetrangeforthefederalfundsratethathasbeenadoptedinthepastbytheCommittee. Thistruncationwould
notbeintendedtoindicatethelikelihoodoftheuseofnegativeinterestratestoprovideadditionalmonetarypolicy
accommodationifdoingsowasjudgedappropriate. Insuchsituations,theCommitteecouldalsoemployothertools,
includingforwardguidanceandlarge-scaleassetpurchases,toprovideadditionalaccommodation. Becausecurrent
conditionsmaydifferfromthosethatprevailed,onaverage,overtheprevious20years,thewidthandshapeofthe
confidenceintervalestimatedonthebasisofthehistoricalforecasterrorsmaynotreflectFOMCparticipants’current
assessmentsoftheuncertaintyandrisksaroundtheirprojections.
*Theconfidenceintervalisderivedfromforecastsoftheaveragelevelofshort-terminterestratesinthefourth
quarteroftheyearindicated;moreinformationaboutthesedataisavailableintable2. Theshadedareaencompasses
lessthana70percentconfidenceintervaliftheconfidenceintervalhasbeentruncatedatzero.
Page 15 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Table 2. Average Historical Projection Error Ranges
(Percentage points)
Variable 2025 2026 2027 2028
Change in real GDP1 .............. ± 1.4 ± 1.8 ± 2.1 ± 2.3
Unemployment rate1 .............. ± 0.5 ± 1.3 ± 1.9 ± 2.1
Total consumer prices2 ............ ± 1.0 ± 1.8 ± 1.8 ± 1.7
Short-term interest rates3 ......... ± 0.5 ± 1.7 ± 2.3 ± 2.8
Note: Errorrangesshownaremeasuredasplusorminustherootmeansquared
errorofprojectionsfor2005through2024thatwerereleasedinthefallbyvarious
privateandgovernmentforecasters. Asdescribedinthebox“ForecastUncertainty,”
under certain assumptions, there is about a 70 percent probability that actual
outcomesforrealGDP,unemployment,consumerprices,andthefederalfundsrate
willbeinrangesimpliedbytheaveragesizeofprojectionerrorsmadeinthepast.
Formoreinformation,seeDavidReifschneiderandPeterTulip(2017),“Gauging
the Uncertainty of the Economic Outlook Using Historical Forecasting Errors:
TheFederalReserve’sApproach,”FinanceandEconomicsDiscussionSeries2017-
020(Washington: BoardofGovernorsoftheFederalReserveSystem,February),
https://dx.doi.org/10.17016/FEDS.2017.020.
1. Definitionsofvariablesareinthegeneralnotetotable1.
2. Measureistheoverallconsumerpriceindex,thepricemeasurethathasbeen
mostwidelyusedingovernmentandprivateeconomicforecasts. Projectionsare
percentchangesonafourthquartertofourthquarterbasis.
3. For Federal Reserve staff forecasts, measure is the federal funds rate. For
otherforecasts,measureistherateon3-monthTreasurybills. Projectionerrorsare
calculatedusingaveragelevels,inpercent,inthefourthquarter.
Page 16 of 17
For release at 2:00 p.m., EDT, September 17, 2025
Forecast Uncertainty
The economic projections provided by the members of rent assessments of the uncertainty surrounding their projec-
the Board of Governors and the presidents of the Federal tions are summarized in the bottom-left panels of those fig-
Reserve Banks inform discussions of monetary policy among ures. Participants also provide judgments as to whether the
policymakers and can aid public understanding of the basis risks to their projections are weighted to the upside, are
for policy actions. Considerable uncertainty attends these weighted to the downside, or are broadly balanced. That is,
projections, however. The economic and statistical models while the symmetric historical fan charts shown in the top
and relationships used to help produce economic forecasts panels of figures 4.A through 4.C imply that the risks to par-
are necessarily imperfect descriptions of the real world, and ticipants’ projections are balanced, participants may judge that
the future path of the economy can be affected by myriad there is a greater risk that a given variable will be above rather
unforeseen developments and events. Thus, in setting the than below their projections. These judgments are summa-
stance of monetary policy, participants consider not only rized in the lower-right panels of figures 4.A through 4.C.
what appears to be the most likely economic outcome as em- As with real activity and inflation, the outlook for the
bodied in their projections, but also the range of alternative future path of the federal funds rate is subject to considerable
possibilities, the likelihood of their occurring, and the poten- uncertainty. This uncertainty arises primarily because each
tial costs to the economy should they occur. participant’s assessment of the appropriate stance of mone-
Table 2 summarizes the average historical accuracy of a tary policy depends importantly on the evolution of real ac-
range of forecasts, including those reported in past Monetary tivity and inflation over time. If economic conditions evolve
Policy Reports and those prepared by the Federal Reserve in an unexpected manner, then assessments of the appropri-
Board’s staff in advance of meetings of the Federal Open ate setting of the federal funds rate would change from that
Market Committee (FOMC). The projection error ranges point forward. The final line in table 2 shows the error ranges
shown in the table illustrate the considerable uncertainty as- for forecasts of short-term interest rates. They suggest that
sociated with economic forecasts. For example, suppose a the historical confidence intervals associated with projections
participant projects that real gross domestic product (GDP) of the federal funds rate are quite wide. It should be noted,
and total consumer prices will rise steadily at annual rates of, however, that these confidence intervals are not strictly con-
respectively, 3 percent and 2 percent. If the uncertainty at- sistent with the projections for the federal funds rate, as these
tending those projections is similar to that experienced in the projections are not forecasts of the most likely quarterly out-
past and the risks around the projections are broadly bal- comes but rather are projections of participants’ individual as-
anced, the numbers reported in table 2 would imply a prob- sessments of appropriate monetary policy and are on an end-
ability of about 70 percent that actual GDP would expand of-year basis. However, the forecast errors should provide a
within a range of 1.6 to 4.4 percent in the current year, 1.2 to sense of the uncertainty around the future path of the federal
4.8 percent in the second year, 0.9 to 5.1 percent in the third funds rate generated by the uncertainty about the macroeco-
year, and 0.7 to 5.3 percent in the fourth year. The corre- nomic variables as well as additional adjustments to monetary
sponding 70 percent confidence intervals for overall infla- policy that would be appropriate to offset the effects of
tion would be 1.0 to 3.0 percent in the current year, 0.2 to shocks to the economy.
3.8 percent in the second and third years, and 0.3 to 3.7 per- If at some point in the future the confidence interval
cent in the fourth year. Figures 4.A through 4.C illustrate around the federal funds rate were to extend below zero, it
these confidence bounds in “fan charts” that are symmetric would be truncated at zero for purposes of the fan chart
and centered on the medians of FOMC participants’ projec- shown in figure 5; zero is the bottom of the lowest target
tions for GDP growth, the unemployment rate, and infla- range for the federal funds rate that has been adopted by the
tion. However, in some instances, the risks around the pro- Committee in the past. This approach to the construction of
jections may not be symmetric. In particular, the unemploy- the federal funds rate fan chart would be merely a convention;
ment rate cannot be negative; furthermore, the risks around it would not have any implications for possible future policy
a particular projection might be tilted to either the upside or decisions regarding the use of negative interest rates to pro-
the downside, in which case the corresponding fan chart vide additional monetary policy accommodation if doing so
would be asymmetrically positioned around the median pro- were appropriate. In such situations, the Committee could
jection. also employ other tools, including forward guidance and asset
Because current conditions may differ from those that purchases, to provide additional accommodation.
prevailed, on average, over history, participants provide While figures 4.A through 4.C provide information on
judgments as to whether the uncertainty attached to their the uncertainty around the economic projections, figure 1
projections of each economic variable is greater than, smaller provides information on the range of views across FOMC
than, or broadly similar to typical levels of forecast uncer- participants. A comparison of figure 1 with figures 4.A
tainty seen in the past 20 years, as presented in table 2 and through 4.C shows that the dispersion of the projections
reflected in the widths of the confidence intervals shown in across participants is much smaller than the average forecast
the top panels of figures 4.A through 4.C. Participants’ cur- errors over the past 20 years.
Page 17 of 17
Cite this document
APA
Federal Reserve (2025, September 16). Summary of Economic Projections. Sep, Federal Reserve. https://whenthefedspeaks.com/doc/sep_20250917
BibTeX
@misc{wtfs_sep_20250917,
author = {Federal Reserve},
title = {Summary of Economic Projections},
year = {2025},
month = {Sep},
howpublished = {Sep, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/sep_20250917},
note = {Retrieved via When the Fed Speaks corpus}
}