{"id":234625,"date":"2025-09-17T20:08:11","date_gmt":"2025-09-17T20:08:11","guid":{"rendered":"https:\/\/www.europesays.com\/us\/234625\/"},"modified":"2025-09-17T20:08:11","modified_gmt":"2025-09-17T20:08:11","slug":"fed-forecasts-only-one-rate-cut-in-2026-more-conservative-than-expected","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/234625\/","title":{"rendered":"Fed forecasts only one rate cut in 2026, more conservative than expected"},"content":{"rendered":"

Federal Reserve Chairman Jerome Powell talks to reporters following the regular Federal Open Market Committee meetings at the Fed on July 30, 2025 in Washington, DC. <\/p>\n

Chip Somodevilla | Getty Images<\/p>\n

The Federal Reserve is projecting only one rate cut in 2026, less than expected, according to its median projection.<\/p>\n

The central bank’s so-called dot plot, which anonymously shows 19 individual members’ expectations, indicates a median estimate of 3.4% for the federal funds rate at the end of 2026. That compares to a median estimate of 3.6% for the end of this year, following two expected cuts on top of Wednesday’s reduction.<\/p>\n

A single quarter-point reduction next year is significantly more conservative than current market pricing. Traders are currently pricing in two to three more rate cuts next year, according to the CME Group’s\u00a0FedWatch<\/a>\u00a0tool, updated shortly after the decision. The gauge uses prices on 30-day interest rate futures contracts to determine market-implied odds for Fed rate moves.<\/p>\n

Here are the Fed’s latest targets from 19 FOMC members, both voters and nonvoters:<\/strong><\/p>\n

Zoom In IconArrows pointing outwards<\/p>\n

The forecasts, however, showed a large difference of opinion, with two voting members seeing as many as four cuts in 2026. Three officials penciled in three rate reductions next year.<\/p>\n

“Next year’s dot plot is a mosaic of different perspectives and is an accurate reflection of a confusing economic outlook, muddied by labor supply shifts, data measurement concerns and government policy upheaval and uncertainty,” said Seema Shah, chief global strategist at Principal Asset Management.<\/p>\n

The central bank has two policy meetings left this year year, one in October and one in December.<\/p>\n

Updated economic projections from the Fed see slightly faster economic growth in 2026 than was projected in June, while the outlook for inflation is now modestly higher for next year.<\/p>\n

There’s a lot of uncertainty at the central bank going into 2026, including the replacement for Fed Chair Jerome Powell, whose term expires in May 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"Federal Reserve Chairman Jerome Powell talks to reporters following the regular Federal Open Market Committee meetings at the…\n","protected":false},"author":3,"featured_media":234626,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[9167,7789,133,64,81,3346,135,6769,134,67,132,68,3642],"class_list":{"0":"post-234625","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-breaking-news-business","9":"tag-breaking-news-investing","10":"tag-breaking-news-markets","11":"tag-business","12":"tag-business-news","13":"tag-investment-strategy","14":"tag-markets","15":"tag-prices","16":"tag-stock-markets","17":"tag-united-states","18":"tag-unitedstates","19":"tag-us","20":"tag-wall-street"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115221450245649738","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/234625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=234625"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/234625\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/234626"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=234625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=234625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=234625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}