Fed Interest Rate Cut 2025 Predictions. Fed policymakers do see the unemployment rate, now at 4%, rising to finish 2025 at 4.2%, higher than the 4.1% they had forecast in march. The projections for the federal funds rate are the value of the midpoint of the projected appropriate target range for the federal funds rate or the projected appropriate target.
In addition, the fed’s terminal rate is now forecast to be 3.5% instead of 3.0%. The dot plot indicates the governors’ expectations for 50 basis points of rate cuts in 2025, which would bring the fed fund rate to a range of 3.75% to 4%.