FOMC dot plot and economic projections for June 2025

The Dot plot from March 2025 showed:

Fed Dot Plot for June 2025

The NEW projections for June 2025 projects:

Dot plot for June 2025

Compared to March, there are seven members who see no rate cut in 2025 (versus four previously). So more members see policy remaining the same. The median however remains at 3.9% for this year. This suggests that members think that inflation will remain elevated because of tariffs.

For the projections for growth, unemployment and inflation:

1) 2025 GDP

• In March, the median forecast for GDP was 1.7%
• In June, the median forecast for GDP is 1.4% (lower by 0.3%)

2) 2025 PCE inflation

• In March 2025 the projection for headline PCE was 2.7%. For the core PCE it was 2.8%,
• in June, the median forecast for PCE headline is 3.0% (higher by 0.3%). For the core PCE it is 3.1% (higher by 0.3%)

3) Unemployment for 2025

• In March 2025, the projection for unemployment was 4.4%.
• In June, the projection for unemployment is 4.5% (higher by 0.1%)

Economic Projections from June 2025

The overall for 2025 sees lower growth (by 0.3%) and high inflation for both the headline and the core PCE again by 0.3%.

The Fed kept the projections for end of year the Fed funds rate at 3.9%. They did raise the end of year for 2026 x 0.2% to 3.6% and for 2027 is higher also to 3.4% from 3.1%.

For growth in 2026 they see GDP lower by 0.2% to 12.6% from 1.8%.

For unemployment in 2026, they see the unemployment rate remained steady at 4.5% up from 4.3% in March.

For inflation in 2026, they see higher PCE headline and higher core inflation by 0.2% to 2.4%. In 2027 they still see inflation marginally above the target at 2.1% for both the core and the headline. That is up from 2.0% in March. This article was written by Greg Michalowski at www.forexlive.com.