Let's take a look at the latest FOMC dot plot data together:

1. The median interest rate forecast for 2025 is approximately 3.5–3.75%

• Most of the black dots for 2025 are concentrated in the range of 3.5%–4.25%, but the median blue dot (all blue dots in the chart) falls around 3.5–3.75%.

→ Note: The Federal Reserve expects to continue lowering interest rates close to neutral levels in 2025.

2. Expectations for further declines in 2026–2027

• The concentration of black dots for 2026 shifts down to 2.75–3.75%, with a median of approximately 3.0–3.25%

• The concentration for 2027 is even lower than for 2026, with some forecasts even reaching 2.5%–2.75%

→ Note: The Federal Reserve expects future inflation to decline and economic slowdown, leading to gradual rate reductions.

3. Long-term interest rate expectations (Longer Run) are approximately 2.75–3.0%

• The rightmost column shows the long-term median falling around 2.75%-3.0%

→ Conclusion: The Federal Reserve believes that the eventual interest rate level will stabilize around 3% (neutral rate expectations remain unchanged).

4. Market-implied rates (red dots) are lower than officials' forecasts

• The red dots in the chart represent the market's expected rates calculated based on Fed Funds futures

• The red dots are generally lower than the median black dots

→ Note: The market is more dovish than the Federal Reserve (expecting larger and faster rate cuts).