Will Interest Rates Go Down in 2027? What the Fed’s Dot Plot Says
The Fed's own projections show no rate cuts in 2027. Here's what the dot plot says, what could change it, and how it hits your wallet.
- Short answer: the Fed itself doesn’t expect to cut interest rates in 2027. Its officials’ median projection keeps the federal funds rate at about 4.1% at the end of both 2026 and 2027.
- Today: the Fed’s target range is 3.75%–4.00% after a hike in September and a hold on October 28, 2026.
- Next step: markets expect a possible hike at the December 8–9 meeting, when the Fed also publishes new projections.
- Cuts are penciled in later: officials’ median path shows rates easing to 3.9% in 2028 and 3.6% in 2029.
When people ask “will interest rates go down in 2027?”, they usually mean the Federal Reserve’s rate, the one that moves credit cards, car loans, savings accounts and the general mood of every money headline. Here’s what the Fed has actually told us, and how it ripples into your mortgage.
What the Fed’s dot plot says
Four times a year, each Fed official writes down where they think the federal funds rate should be at the end of each year. Lined up together, those guesses make the famous “dot plot.” Here is the median from September 16, 2026:
| End of year | Median fed funds projection | Back in June |
|---|---|---|
| 2026 | 4.1% | 3.8% |
| 2027 | 4.1% | 3.6% |
| 2028 | 3.9% | 3.4% |
| 2029 | 3.6% | — |
| Longer run | 3.2% | 3.1% |
Two things jump out. First, 4.1% for 2026 is above today’s range, so the median official expects one more hike this year. Second, the 2027 number is the same, so the typical official sees no cuts at all next year. In June, they expected 2027 to be lower than 2026. That shifted as inflation came in hotter than officials expected.
What could change the Fed’s mind
- Inflation cooling faster than expected. This is the big one. The October inflation report (November 10) and November report (December 10) are the next tests.
- A weaker job market. If hiring slows sharply or unemployment jumps, the Fed would likely shift toward cuts sooner.
- A shock to markets or the economy. Sudden stress in financial markets has pushed the Fed to cut quickly in the past.
- The other direction: if inflation keeps surprising on the high side, officials could raise rates more than once. Two of them already voted for a hike in October.
How the Fed’s rate reaches your wallet
| What you have | How closely it follows the Fed | What “no cuts in 2027” means |
|---|---|---|
| Credit cards, HELOCs | Very closely (usually tied to the prime rate) | Rates stay high; pay balances down |
| Savings accounts, CDs | Closely | Good yields likely stick around |
| Car loans | Somewhat | Little relief expected |
| 30-year fixed mortgage | Loosely (follows the 10-year Treasury) | Forecasts see 7%–7.5% next year |
If you have a HELOC or an adjustable-rate loan, the Fed matters a lot to you. Read HELOC vs. home equity loan and how adjustable-rate mortgages work to see how a stuck-high prime rate affects your payment.
What it means for mortgage rates
Mortgage rates are set by investors, not by the Fed, but they listen closely to what the Fed says about inflation. With the Fed signaling “higher for longer,” the major forecasters expect the 30-year fixed rate to stay above 7% through 2027: Fannie Mae says 7.5%, and the MBA says above 7%.
For the full mortgage picture, see will mortgage rates go down in 2027? and our weekly mortgage rate forecast. For the nearer term, read will mortgage rates go down in December?
What to watch next
- Nov 6: October jobs report
- Nov 10: October inflation (CPI)
- Dec 4: November jobs report
- Dec 8–9: Fed meeting with a new dot plot. This is when we’ll learn whether “no cuts in 2027” still holds.
FAQ
Will the Fed cut rates in 2027?
Not according to its own September projections. The median official sees the federal funds rate at about 4.1% at the end of 2027, the same as the end of 2026. That can change at the December meeting.
When will interest rates go down?
The Fed’s median projection doesn’t show cuts until 2028, when it sees 3.9%, and 2029, when it sees 3.6%. A sharp slowdown in inflation or jobs could bring cuts sooner.
Will credit card rates go down in 2027?
Probably not much. Most card rates are tied to the prime rate, which moves with the Fed’s rate. If the Fed doesn’t cut, card rates stay high.
Is the federal funds rate the same as my mortgage rate?
No. The fed funds rate is an overnight rate between banks. Fixed mortgage rates follow longer-term bond yields. That’s why mortgages are around 7.24% while the Fed’s range is 3.75%–4.00%.
Sources: Federal Reserve FOMC statement (Oct 28, 2026), Summary of Economic Projections (Sept 16, 2026) and Chair’s press conference (Oct 28, 2026); St. Louis Fed FRED Blog; Freddie Mac Primary Mortgage Market Survey (Oct 29, 2026); Fannie Mae ESR Housing Forecast (Oct 2026); Mortgage Bankers Association forecast (Oct 11, 2026). Payment example computed by Keys & Coffee. This article is general education, not financial advice. Keys & Coffee is not a lender.
Written by
Shivam Kaushik· IMSHIVA
Founder & Director, QuibbleTech Solutions Pvt Ltd · Editor, Keys & Coffee
Shivam Kaushik is the founder of QuibbleTech Solutions Pvt Ltd and the editor of Keys & Coffee. He is not a licensed loan officer or financial adviser. Every guide here is written in plain English and checked against official sources such as the CFPB, HUD, Fannie Mae, Freddie Mac and the Federal Reserve. For advice on your own loan, talk to a licensed lender.
Keys & Coffee is an independent education site. We are not a lender or mortgage broker, we do not take loan applications or payments, and nothing here is financial advice. This site is not affiliated with Axia Home Loans, Axia Financial, LLC, or Planet Home Lending. Rates and rules change often — always confirm details with a licensed loan officer and check any lender on the NMLS Consumer Access site.
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