The Federal Reserve’s September interest-rate decision arrives Wednesday with something potentially more important than the immediate rate move: a new set of projections showing where policymakers think rates should be at the end of 2027.
The Federal Open Market Committee is meeting September 15–16. The Fed’s official September calendar schedules the policy decision for 2 p.m. Eastern on Wednesday, September 16, followed by Chair Kevin Warsh’s press conference at 2:30 p.m.
Because September is one of the Fed’s quarterly projection meetings, officials will also release a new Summary of Economic Projections, including the closely watched “dot plot.” The September dots have not been published yet. They are projections, not promises, and they do not determine future rate decisions.
But the 2027 column could answer a question that has become much harder since the Fed’s last projections in June: Do policymakers now expect interest rates to remain higher next year as inflation stays elevated, or do they still see room to bring rates down after the current inflation shock passes?
That is distinct from the immediate question of whether the Fed raises rates Wednesday. Investozora’s broader September Fed decision analysis covers that policy debate.
The new issue at this meeting is how much the Fed’s medium-term rate outlook has changed. The starting point is unusually clear. In the Fed’s June 2026 Summary of Economic Projections, the median projected federal funds rate was:
- 3.8% at the end of 2026
- 3.6% at the end of 2027
- 3.4% at the end of 2028
- 3.1% over the longer run
Those medians were already substantially higher than the projections issued only three months earlier. In March, the median federal funds rate projection had been 3.4% for 2026, 3.1% for 2027 and 3.1% for 2028. That means the June SEP lifted the 2027 median by 0.5 percentage point, from 3.1% to 3.6%.
The shift was not isolated from the Fed’s inflation outlook. June projections also raised the median forecast for 2026 PCE inflation to 3.6% from 2.7% in March, while the core PCE inflation forecast moved to 3.3% from 2.7%.
Investozora’s Fed dot plot guide explains an important limitation: each dot represents one FOMC participant’s individual judgment about appropriate monetary policy. The dots are anonymous and do not commit the committee to a future decision.
What matters Wednesday is how those individual judgments have changed since June. Several important pieces of economic information have arrived since that projection set.
The Federal Reserve left its target range unchanged at 3.50% to 3.75% on July 29, but the vote exposed a sharper disagreement than in June. The July FOMC statement shows that Beth Hammack, Neel Kashkari and Lorie Logan dissented because they preferred an immediate quarter-point rate increase.
Inflation has remained elevated. The Bureau of Economic Analysis reported in its July Personal Income and Outlays release that the PCE price index was 3.7% higher than a year earlier in July, while core PCE inflation was 3.3%.
The Fed will not have an official August PCE reading when it votes Wednesday. BEA has scheduled that report for September 30. But policymakers do have newer consumer and producer inflation data.
The Bureau of Labor Statistics reported in its August CPI release that consumer prices rose 0.4% in August after increasing 0.1% in July. Headline CPI inflation remained 3.4% from a year earlier. Core CPI rose 0.3% during August and 2.4% over 12 months.
One day earlier, BLS reported in its August Producer Price Index release that final-demand producer prices increased 0.4% during the month and 5.4% from a year earlier.
The labor data have not shown the kind of deterioration that would make the inflation side of the Fed’s mandate easy to ignore. The August employment report showed nonfarm payrolls increasing by 162,000 while the unemployment rate remained at 4.1%. BLS also revised June and July payroll growth higher by a combined 55,000 jobs.
Taken together, those releases do not tell the Fed what decision it must make. They do, however, give policymakers a different information set from the one they used to build the June projections.
That is why the 2027 dots deserve particular attention. The June dot distribution shows that the reported 3.6% median corresponds to a projected midpoint around 3.625%. That was almost exactly the midpoint of the current 3.50%–3.75% target range.
If the Fed raises the target range by a quarter point Wednesday, as many economists currently expect, the new range would become 3.75%–4.00%, with a midpoint of 3.875%. That range is an Investozora calculation based on the current official target and a hypothetical 25-basis-point increase; it is not a Fed decision.
Against that hypothetical post-meeting starting point, the new 2027 median would become much more informative. If the 2027 median remained around 3.625%, it would imply that the median participant still sees some eventual easing after a September increase.
A median around 3.875% would instead suggest that policymakers, collectively at the median, expect little or no net reduction from a hypothetical post-September target midpoint by the end of 2027.
A median above that level would represent an even more restrictive projected path. Those are interpretation scenarios, not forecasts of what the dots will show.
They also illustrate why the September projection could matter more for bond markets and borrowing expectations than the first few seconds of the rate announcement itself.
Economists have already moved sharply toward expecting a September increase. A Reuters poll published September 14 found that 85% of economists surveyed expected a quarter-point hike, while Investozora separately reported that Goldman Sachs, JPMorgan and HSBC had moved to a September-hike forecast.
But getting Wednesday’s immediate rate move right does not answer the next question. A quarter-point hike followed by projected easing in 2027 tells a different economic story from a quarter-point hike accompanied by dots showing rates staying close to 4% for another year.
The economic projections released alongside the dots may explain why the path changed. In June, the median Fed participant projected 2027 PCE inflation of 2.3%, core PCE inflation of 2.5%, unemployment of 4.3% and real GDP growth of 2.3%.
Investors should therefore read the 2027 rate median together with any changes to those forecasts rather than treating the dot plot as an isolated prediction.
A higher rate path paired with higher projected inflation would point toward a more persistent price-pressure problem in policymakers’ forecasts. A higher rate path without a comparable inflation revision could indicate that officials believe policy must remain restrictive for longer for other reasons. Those interpretations cannot be confirmed until the new SEP is released.
For households, there is no new Fed rate to act on yet. The current federal funds target remains 3.50% to 3.75%. Mortgage rates, Treasury yields, savings rates, credit-card rates and other borrowing costs also do not move mechanically by the same amount as a Fed decision.
Wednesday will provide three separate pieces of evidence that should not be confused with one another: the actual rate decision, the vote split, and the projected future path contained in the new SEP. The immediate decision will show what the Fed is doing now.
The 2027 dot plot may reveal something more durable: whether policymakers think today’s inflation problem requires interest rates to remain higher well into next year, or whether they still expect to reverse part of the tightening once price pressures ease. That answer becomes official only when the Federal Reserve releases the September projections at 2 p.m. Eastern on September 16.
