Fed Rate-Cut Hopes Recede as Reuters Poll Shows Growing View of Hold Through 2026
Summary
- A Reuters poll of economists showed growing expectations that the Fed will keep its benchmark interest rate unchanged through 2026.
- Economists' monetary policy outlook turned more hawkish than in April, with fewer respondents expecting rate cuts.
- US inflation forecasts were revised higher, while higher oil prices, firmer US Treasury yields and geopolitical risks in the Middle East were seen fueling inflation concerns.
Forecast Trend Report by Period
Rising concerns about US inflation are also weakening expectations for Federal Reserve interest-rate cuts, a survey showed.
Walter Bloomberg, an overseas economic news account, reported on May 19 that a recent Reuters poll of economists found a substantial share of respondents expects the Fed to keep its benchmark interest rate unchanged through the end of this year.
The survey showed economists have turned more hawkish on monetary policy since April. Fewer respondents now expect rate cuts, while the share projecting no change in rates through the end of 2026 rose sharply.
Inflation forecasts were also revised higher. Economists expect US core personal consumption expenditures inflation to average 3.9% in the second quarter before gradually easing afterward.
The report said higher oil prices, firmer US Treasury yields and geopolitical risks in the Middle East have again stoked inflation concerns in financial markets.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
