Federal Reserve FOMC Inflation Forecast Accuracy

Projected and Actual PCE Inflation, and the Gap Between Them  ·  Target Years 2008 – 2027

Left Axis:
Inflation Ran Hotter Than the Fed Projected
Inflation Ran Cooler Than the Fed Projected
Right Axis:
Projected PCE Inflation
Actual PCE Inflation
Projection Not Yet Final
80% Error Bounds on the Projection
Largest Misses
Most Underestimated
+4.00 pp
2021 — projected 1.80%, actual 5.80%
Most Overestimated
−1.07 pp
2015 — projected 1.30%, actual 0.23%
Average Miss, Either Direction
0.80 pp
Across 18 target years
Since 2008
Years Underestimated
8
Inflation came in above the projection
Years Overestimated
10
Inflation came in below the projection
Resolved Target Years
18
2008 – 2025; charted through 2027
2026 Projection
2.40%
Set at the SEP of 10 December 2025; 2026 is not yet resolved
0.61 pp bounds: 1.79% to 3.01%
2027 Projection
2.35%
Standing at the SEP of 16 September 2026; not final until the last SEP before 2027 begins
0.78 pp bounds: 1.57% to 3.13%