The Federal Reserve Board logo is visible on the William McChesney Martin Jr. Building in Washington, DC, on December 9, 2025.
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The Fed expects to cut interest rates only once in 2026, unchanged from its previous forecast made about three months ago.
The central bank’s so-called dotplot, which shows the anonymous forecasts of its 19 individual members, shows that the median forecast for the federal funds rate at the end of 2026 is 3.4%, a quarter of a percentage point lower than the current range of 3.5% to 3.75%. This forecast is the same as last quarter’s forecast.
The Federal Reserve on Wednesday cut its key overnight borrowing rate by a quarter of a percentage point, marking the third cut in 2025.
Here are the latest Fed targets from the 19 FOMC members, including both voters and non-voters:
The Fed’s 2026 interest rate outlook was the most important data point traders focused on as central banks become more fractured. Wednesday’s decision had three dissenting opinions. Gov. Stephen Milan supported a larger half-point cut, while Kansas City Regional President Jeffrey Schmidt and Chicago Regional President Austan Goolsby supported holding the line.
In addition to two dovish voters voting “no” on the rate cut, four non-voting participants also said they disagreed with the decision. Seven officials also said they wanted no cuts next year, according to Dotplot.
The Fed expects the final rate to reach 3.1% in 2027, signaling further rate cuts. This rate is expected to remain the same in 2028, according to the dotplot.
—CNBC’s Jeff Cox contributed reporting.
