What’s Next for Federal Interest Rates in 2025?

Economic Projections and Policy Signals

The Federal Reserve’s latest interest rate statement comes paired with the “dot plot”—a snapshot of the Federal Open Market Committee (FOMC) members’ votes on the future trajectory of interest rates. Recent projections suggest the central bank may lean toward fewer rate cuts than earlier forecasts implied, hinting at a more conservative stance on easing monetary policy.

Alongside this, the Fed shares its outlook on key economic indicators: growth, inflation, and unemployment. These estimates offer a window into the committee’s confidence—or concerns—about the U.S. economy’s path forward, whether it’s poised for improvement or facing potential headwinds.

All eyes will likely turn to Fed Chair Jerome Powell’s press conference following the rate decision. With markets anticipating steady rates at the March meeting, investors will dissect his comments for any subtle hints about the central bank’s next moves.

How Prices Could React

If Powell signals future rate cuts, the U.S. dollar and Treasury yields might dip, reflecting their close tie to interest rate trends. Conversely, any suggestion that the Fed might hold off on lowering rates could lift the dollar, putting downward pressure on most major currencies.

Gold, with its typical inverse dance with the dollar, is expected to move in the opposite direction—climbing if the dollar softens and retreating if it gains strength.