loading . . . FOMC Summary of Economic Projections, December 2025 In a previous FRED blog post, we discussed the Summary of Economic Projections (SEP) released by the FOMC this past September. In this post, we again use ALFRED to compare the latest projections released in December 2025 with several of the recent projections for the unemployment rate, core PCEPI inflation, real GDP growth, and the federal funds rate. Note that these projections represent neither a committee plan nor a decision on future policy.
Our 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 blue bar, the median FOMC participant projects that the unemployment rate will average 4.5% in Q4 2025 and drop to 4.4% by Q4 2026 and 4.2% by Q4 2027. This path is largely unchanged from the September projection.
Our second graph, above, shows the core inflation rate projections for the same years. The median FOMC participant projects 2.5% inflation over 2026, which is slightly lower than the 2.6% projection in September. Median projections for 2027 and 2028 were unchanged.
Our third graph, below, shows the median projections for real GDP growth. Growth projections for 2025 have been revised upward since September, from 1.6% to 1.7%. Growth projections for 2026 are notably higher than they were in September, revised upward from 1.8% to 2.3%. As Chair Powell noted during the press conference, the apparent boost to growth in 2026 is partially due to the effects of the government shutdown shifting about 0.2% of GDP growth from late 2025 into early 2026.
Our final graph, below, shows the median participantâs projections of the federal funds rate. The December median projections over the forecast horizon were from their September values. As a result, there is no December vintage in ALFRED. It is worth noting that, although the median projections were unchanged, the forecasts of individual participants were revised. For example, in the September projections, participantsâ forecasts for the end of 2025 ranged from 2.9% to 4.4%, while the range narrowed to 3.4% to 3.9% in the December projections. The median projection for the policy rate at the end of 2026 was unchanged between September and December, at 3.4%. The range of projections widened from a range of 2.6% to 3.9% to a range of 2.1% to 3.9%. The range of projections for 2027 was unchanged, at 2.4% to 3.9%.
**How these graphs were created** : Search ALFRED for âFOMC unemploymentâ and take the median projection. Click on âEdit Graph,â 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 âFOMC Consumption,â âFOMC Growth,â and âFOMC Fed Funds Rate.â
Suggested by John Fuller and Charles Gascon. https://fredblog.stlouisfed.org/2025/12/fomc-summary-of-economic-projections-december-2025/
