FOMC Summary of Economic Projections, September 2025

In a previous FRED blog post, we discussed the Summary of Economic Projections (SEP) released by the FOMC this past June. In this blog post, we will again use ALFRED to compare the latest projections released in September 2025 with several of the recent projections for the following variables:

• the unemployment rate
• core PCEPI inflation
• real GDP growth
• the federal funds rate

It's important to note that these projections represent neither a committee plan nor a decision on future policy.

The first ALFRED graph, above, shows the unemployment rate projections for the fourth quarters of 2025, 2026, 2027, and 2028 according to the four most recent SEPs. Every September the FOMC adds another year to the projections. Most recently, as shown by the gold bar, the median FOMC participant projects that the unemployment rate will average 4.5% in Q4 2025 with a drop to 4.3% by 2027. This is slightly below the projection provided in June. The median projection for the unemployment rate in 2028 is 4.2%.

The second graph shows the core inflation rate projections for the same years. The median FOMC participant projects 3.1% inflation over 2025, with a return to the FOMC target of 2.0% by 2028.

The third graph, below, shows the median projections for real GDP growth. Growth projections for 2025 have been revised downward since December 2024, from 2.1% to 1.6%, but are above June's projection of 1.4%. The projections for real GDP growth in 2026 and 2027 are slightly higher than they were in June, revised upward from 1.6% to 1.8% and 1.8% to 1.9%, respectively. The longer-run projection for 2028 is 1.8%.

Our final graph below shows the median participant's projections of the federal funds rate. The most recent projections for the fourth quarter of 2025 are lower than their June 2025 values: from 3.9% down to 3.6%. But they are similar to the March and December projections for 2026 and 2027, at 3.4% and 3.1%. June's projections were slightly raised for 2026 and 2027, at 3.6% and 3.4%. The federal funds rate is projected to remain at 3.1% in 2028. It is worth noting, though, that focusing on the median federal funds rate projection does obscure some of the dispersion of the individual participant projections. For example, projections for the year-end policy rate range from 2.6% to 3.9%.

How these graphs were created: Search ALFRED for "FOMC unemployment" and take the median projection. Click on "Edit Graph," choose a bar graph, and add three bars with the same series again. Finally, select the proper vintage for each bar. For the other three graphs, proceed similarly with "FOMC Consumption," "FOMC Growth," and "FOMC Fed Funds Rate."

Suggested by by John Fuller and Charles Gascon.