Fed lowers its forecast for US economic growth from 1.7% to 1.4% by the end of 2025 from 1.7%

Federal Reserve monetary policy officials raised their median inflation forecast in their updated economic forecasts from 2.7% to 3% by the end of the year, while lowering their median forecast for US economic growth from 1.7% to 1.4% by the end of the year.

The US Federal Reserve lowered its forecast for US economic growth for this year and next compared to its March forecast.

The Fed’s new forecast, released Wednesday, includes a 1.4% growth rate for the US gross domestic product this year, compared to the 1.7% forecast in March.

The Fed expects economic growth in 2026 to reach 1.6%, compared to 1.8% in its previous forecast, while its 2027 growth forecast remains unchanged at 1.8%. However, Federal Reserve officials maintained their expectations for two rate cuts this year, with the median Federal Open Market Committee forecast still pointing to a 50 basis point rate cut in 2025. However, several officials have lowered their rate cut expectations. Seven officials now expect no rate cuts this year, compared to four in March. Two others indicated one cut this year.