Federal Reserve Projections

The Federal Open Market Committee (FOMC) sits at the center of American monetary policy, wielding more influence over interest rates and economic growth than any other institution in the United States. The twelve-member committee—comprising the seven Federal Reserve governors, the New York Fed president, and four rotating regional bank presidents—meets eight times annually to set the federal funds rate, the benchmark that determines borrowing costs for mortgages, car loans, and corporate debt. Created by the Banking Acts of 1933 and 1935, the FOMC now executes monetary policy aimed at the Fed's dual mandate of maximum employment and price stability.

Cost of Borrowing

For 2026, FOMC projects the Fed Funds rate at 3.4%.

Economic Growth

For 2026, FOMC growth projections are 2.3%.

Inflation Rate

For 2026, FOMC projects an inflation rate of 2.5%.

Unemployment Rate

FOMC projects the unemployment rate will average 4.5% in Q4 2025 and drop to 4.4% by Q4 2026 and 4.2% by Q4 2027.

The FOMC is arguably the most powerful institution that few people truly understand. When Chair Jerome Powell and his colleagues adjust interest rates or signal how policy may evolve, they move markets worth trillions of dollars, shape hiring decisions across millions of businesses, and directly affect household purchasing power through their influence on inflation and employment.

The full report can be found below.