What interest rate does the FOMC expect?
As of the meeting on March 19, 2025, the Federal Open Market Committee (FOMC) has maintained the federal funds rate at 4.25%–4.50%. Despite this, FOMC forecasts indicate the possibility of two rate cuts over the year, each likely to be by 0.25 percentage points, which could lead to a reduction in the rate to 3.75%–4.00% by the end of the year.
These forecasts accompany a revised economic outlook: FOMC lowers the GDP growth forecast for 2025 to 1.7% from the previous 2.1% and raises the inflation forecast to 2.7%.
However, it is important to note that these forecasts can change, as FOMC members have expressed differing opinions on the necessity and timing of rate cuts, reflecting the inherent uncertainty of economic conditions.
How often does the Fed meet to change interest rates?
The Federal Reserve (through the FOMC) meets eight times a year on a pre-scheduled basis to discuss and potentially adjust interest rates. However, interest rate changes do not occur at every meeting; decisions are made based on economic conditions, inflation trends, and employment data.