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The Federal Reserve's quarterly projections report, which reflects the views of Federal Open Market Committee (FOMC) members and regional Federal Reserve Bank presidents, showed that policymakers maintained their expectation of a single interest rate cut in both 2026 and 2027.
The report, released Wednesday following the committee meeting, also revealed that policymakers slightly raised their economic growth forecasts through 2028, after the Fed kept its benchmark interest rate unchanged for the second consecutive meeting within the 3.50%–3.75% range.
However, policymakers revised up their forecasts for both headline and core inflation, noting that the impact of the Middle East's ongoing conflict on the world’s largest economy remains uncertain.
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Median Forecasts of Fed Officials for Key US Economic Indicators (%) |
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|
Indicator |
Forecast Date |
2026 |
2027 |
2028 |
|
Real GDP Growth |
March |
2.4 |
2.3 |
2.1 |
|
December |
2.3 |
2.0 |
1.9 |
|
|
Unemployment Rate |
March |
4.4 |
4.3 |
4.2 |
|
December |
4.4 |
4.2 |
4.2 |
|
|
PCE Inflation |
March |
2.7 |
2.2 |
2.0 |
|
December |
2.4 |
2.1 |
2.0 |
|
|
Core PCE Inflation |
March |
2.7 |
2.2 |
2.0 |
|
December |
2.5 |
2.1 |
2.0 |
|
|
Interest Rate |
March |
3.4 |
3.1 |
3.1 |
|
December |
3.4 |
3.1 |
3.1 |
|
These projections reflect policymakers’ expectations for changes in key economic indicators between the first quarter of each target year and the same quarter of the preceding year.
Recent data showed that the US unemployment rate rose to 4.4% in February, contrary to expectations of stability, while the Personal Consumption Expenditures (PCE) price index stood at 2.8% in January, with the core index at 3.1%.
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