The latest published Fed dot plot reveals significant divergence among Federal Open Market Committee (FOMC) members regarding interest rate policy for 2025. This divergence reflects differing positions among decision-makers in their assessment of the economic outlook, adding uncertainty to the future direction of monetary policy.

Some FOMC members expressed concerns about the slowing economic growth and tend to lower the Intrerest Rate to a range of 3.25%-3.5%. Meanwhile, another group of officials advocates maintaining the Intrerest Rate around 4.0% to further observe the economic situation. More notably, a small number of hawkish officials believe that the inflation threat has not yet been fully eliminated, and therefore recommend keeping the Intrerest Rate above 4%.

In addition, the appointment of new member Stephen Milan may influence the overall inclination of the committee, as he is considered likely to support relatively lower interest rate levels. This personnel change undoubtedly adds complexity to the FOMC's decision-making.

Overall, the Fed's interest rate cut strategy in 2025 still has many variables. The timing, frequency, and magnitude of rate cuts will depend on the performance of future economic data and the policy games among decision-makers. Market participants and economists need to closely monitor changes in U.S. economic indicators, as well as the comments of FOMC members in public, to better anticipate the Fed's policy direction.