According to the central bank’s median interest rate forecast, the Federal Reserve on Wednesday forecast just two quarter-point interest rate cuts in 2025, fewer than previously forecast.

The so-called dot plot, which indicates individual members’ interest rate expectations, showed that officials expect their key interest rate to fall to 3.9% by the end of 2025, a target range of 3.75% to 4%. Previously, the Fed had forecast four quarter-point cuts and one full percentage point reduction in 2025 at a meeting in September.

At the Fed’s final policy meeting of the year on Wednesday, the committee cut the federal funds rate to a target range of 4.25% to 4.5%.

A total of 14 of 19 officials planned two rate cuts of a quarter point or less in 2025. Only five members predicted more than two rate cuts next year.

Assuming quarter-point increases, officials predict two more cuts in 2026 and another in 2027. Longer term, the committee expects the “neutral” key rate to be 3%, 0.1 percentage points higher than the September update, a level that has already increased gradually this year.

Here are the Fed’s latest targets from 19 FOMC members, both voters and non-voters:

The forecasts also showed slightly higher inflation expectations. Headline and core inflation forecasts using the Fed’s preferred measure were raised to 2.4% and 2.8%, respectively, compared with September estimates of 2.3% and 2.6%, respectively.

The committee also raised its forecast for full-year gross domestic product growth to 2.5%, half a percentage point higher than in September. However, officials expect GDP to slow to the long-term forecast of 1.8% in the following years.

As for the unemployment rate, the Fed cut its estimate to 4.2% from 4.4% previously.

—CNBC’s Jeff Cox contributed reporting.