The Federal Open Market Committee (FOMC), which sets interest rates, will rotate four new members with voting rights next year, three of whom are considered hawks.

The new members with voting rights in 2025 will include Boston Fed President Susan Collins, Chicago Fed President Austan Goolsbee, St. Louis Fed President Alberto Musalem, and Kansas City Fed President Jeffrey Schmid.

According to data from InTouch Capital Markets, Goolsbee is the only dovish among these four individuals. The company ranks Collins and Musalem as mildly hawkish, while Schmid is moderately hawkish.

Goolsbee stated on December 20th that recent economic data has made his forecast for the 2025 interest rate path shallower, as the recent economic data has "added a little bit of uncertainty" and noise.

He said, "I have been saying that the overall trend is a significant decrease in inflation. I believe we are on the path to reaching the 2% level, and interest rates may still fall significantly in the next 12 to 18 months. Whether it happens three months earlier or three months later, I don't think that's the most important thing

The latest Summary of Economic Forecasts (SEP) released by the FOMC on December 18th shows that members expect the pace of interest rate cuts to slow down next year and beyond due to inflation stickiness.

Given that the benchmark federal funds rate at the end of this year is 4.25% -4.5%, the latest median SEP forecast shows a 50 basis point rate cut in 2025, lower than the previously estimated 100 basis points.

The neutral policy interest rate is expected to decrease to 3.4% and 3.1% in 2026 and 2027, respectively.

At the same time, the FOMC expects PCE to reach 2.5% for the full year of 2025, and then decline to 2.2% and 2% in 2026 and 2027, respectively.

In addition, the unemployment rate is expected to remain at 4.3% by 2027.