Fed median forecast shows one more rate hike in 2026, rates unchanged in 2027

BlockBeats news, September 17: The Federal Reserve implemented its first rate hike in three years on the 17th, and the median of its dot plot projections shows one rate hike this year, with rates held steady in 2027.

The new projections show rates will decline in 2028 and remain between 3.5% and 3.75% in 2029. Previously, in its June projections, the Fed expected a 25 basis point rate hike this year and one rate cut in 2027.

The Fed also raised its longer-run projected federal funds rate to 3.2%, compared with 3.1% in the June forecast. Of the 19 policymakers, 18 submitted rate outlook projections, strongly indicating that Fed Chair Warsh, as in June this year, did not provide specific projections. The Fed's projections also show that policymakers now expect inflation to be generally higher this year and in the coming years. (Jinshi)