What does the "dot plot" indicate about the direction of interest rates?

The Federal Reserve's quarterly "dot plot" shows projections for the federal funds rate, a short-term interest rate that can indirectly influence savings yields and rates on consumer loans.

[Alt Text: Scatter plot shown with dots for 2025, 2026, 2027, 2028, and Longer run, and the title: What does the "dot plot" indicate about the direction of interest rates?]

Markets general focus on the median "dot" or projection.

[Alt Text: Median row of dots for each year on the scatter plot is circled.]

Each dot represents a Fed policy maker's view for where they think the target range for the fed funds rate will be at the end of each year.

[Alt Text: Zoom in on a single dot in scatter plot with the text: For example, this official projects a range of 2.75% to 3.00% at the end of 2025]

At its September 2025 meeting, the Fed lowered the fed funds rate by 0.25% to a range of 4% to 4.25%.

[Alt Text: Title on scatter plot changes to: In June, the median projection suggested two rate cuts (total) this year.]

The median dot on the September dot plot projects that the fed funds rate will decline to a range of 3.5% to 3.75% by year-end 2025, implying two more rate cuts of 0.25% this year.

[Alt Text: Title on scatter plot changes to: This updated projection implies a total of 3 rate cuts by the end of the year. The median dot for 2025 is circled, and the area on the dot plot representing 3.5% to 3.75% is shaded in gray, along with the text "Projected Federal Funds Rate"]

There is a very wide dispersion in the dot plot, this year and looking ahead, highlighting the uncertain outlook.

[Alt Text: Title on scatter plot changes back to original title: What does the "dot plot" indicate about the direction of interest rates?]