Federal Reserve System (FED) FOMC Meeting summary

Economic outlook and inflation

• Economic growth remains solid but is moderating, with GDP projected to rise 1.7% in 2024, 1.7% in 2025, and up to 1.8% in 2026 and 2027, with a longer-run estimate of 1.8%.

• Inflation has eased but remains above the 2% target, with recent increases attributed in part to tariffs.

• The median projection for total PCE inflation is 2.7% for 2024 and 2025, 2.2% for 2025 and 2026, and 2% by 2027.

• Short-term inflation expectations have risen, mainly due to tariffs, but longer-term expectations remain anchored.

• Uncertainty about the economic outlook is high, with both households and businesses expressing concerns.

Monetary policy decisions and guidance

• The policy interest rate remains unchanged, with the federal funds rate target at 4.25–4.5%.

• The pace of balance sheet reduction will slow, lowering the monthly cap on Treasury redemptions from $25 billion to $5 billion starting April.

• The median projection for the federal funds rate is 3.9% at the end of 2024 and 2025, 3.4% at the end of 2026, and 3.1% by 2027 and the longer run.

• Policy is not on a preset course; adjustments will depend on incoming data and evolving risks.

• The Committee is well-positioned to wait for greater clarity before making further policy changes.

Labor market and employment

• Labor market conditions are solid, with unemployment at 4.1% and job gains averaging 200,000 per month.

• The labor market is broadly in balance, with low hiring and firing rates and healthy job creation.

• Wage growth is outpacing inflation and is at a more sustainable pace.

• The median unemployment rate projection is 4.4% for 2024 and 2025, 4.3% for 2026 and 2027, and 4.2% in the longer run.

• Most job growth has recently been in government or government-adjacent sectors, but overall employment remains strong.