FOMC officials expect the core personal consumption expenditures price index, which excludes food and energy, to increase at a 3.1% rate in 2025.

In an updated forecast, Fed officials now see core PCE inflation jumping to 3.1% by the end of the year from the current 2.5% rate in April. This is much higher than the 2.8% core rate forecast in March.

The Fed kept its key rate unchanged for the fourth straight meeting Wednesday, and said the economy is expanding at “a solid pace.”