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Editor’s Note: Article has been updated with additional information.
The Federal Reserve held interest rates unchanged at 3.50%–3.75% for the third straight meeting on Wednesday, as widely expected by market participants.
The FOMC statement noted that while economic activity has been expanding at a solid pace, job gains have remained low, and inflation remains somewhat elevated.
Fed Governor Stephen Miran was the lone dissenter, voting in favor of a 25-basis-point rate cut.
The updated Summary of Economic Projections (SEP) pointed to higher inflation and slightly higher economic growth compared to December.
- The Fed now sees PCE inflation at 2.7% in 2026, up from 2.4% projected in December.
- Real GDP growth is now projected at 2.4% for 2026, up from 2.3% in December.
| 2026 | 2027 | 2028 | |
|---|---|---|---|
| Change in real GDP (%) | 2.4 | 2.3 | 2.1 |
| December projection (%) | 2.3 | 2.0 | 1.9 |
| Unemployment rate (%) | 4.4 | 4.3 | 4.2 |
| December projection (%) | 4.4 | 4.2 | 4.2 |
| PCE inflation (%) | 2.7 | 2.2 | 2.0 |
| December projection (%) | 2.4 | 2.1 | 2.0 |
| Core PCE inflation (%) | 2.7 | 2.2 | 2.0 |
| December projection (%) | 2.5 | 2.1 | 2.0 |
The dot plot — the chart showing where each Fed official expects interest rates to be in the coming years — …
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