Summary
- The Fed said it expects to deliver one rate cut each in 2026 and 2027, each amounting to 25 bp.
- The Fed put the long-run policy rate at about 3.1% and the 2026 policy rate at around 3.4%, maintaining a gradual easing stance.
- The Fed raised its inflation forecast to 2.7% and assessed the impact of geopolitical conditions in the Middle East on the economy as “uncertain.”
Forecast Trend Report by Period
The US Federal Reserve (Fed) maintained a cautious stance, laying out a limited path for future rate cuts.
According to the Federal Reserve on the 18th (local time), the Fed projected it would deliver one rate cut each in 2026 and 2027, and put the long-run policy rate at about 3.1% and the 2026 rate at around 3.4%. Each cut is expected to be a “gradual cut” of 25 bp (0.25%p).
However, the inflation forecast was revised up to 2.7%, signaling that price pressures remain persistent. The unemployment rate is expected to hold at about 4.4%, while economic growth is projected to improve slightly.
Meanwhile, Fed Governor Steven Miran was reported to have dissented from the decision, arguing for a rate cut.
The Fed also described the potential impact of geopolitical conditions in the Middle East on the economy as “uncertain,” suggesting it could be a variable in the future policy path.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
