Menu

Search

  |   Central Banks

Menu

  |   Central Banks

Search

Federal Reserve holds interest rates steady, projects one rate cut in 2026

The Federal Open Market Committee (FOMC) maintained the policy rate at 3.5%–3.75% for the second straight meeting
The Fed adjusted its language on the labor market in its statement, stating that the unemployment rate has "been little changed in recent months" rather than "shown signs of stabilization," and emphasized the increased uncertainty in the outlook brought on by the ongoing violence in the Middle East.

The Fed published its revised Summary of Economic Projections (SEP), which included the median projections of FOMC members, along with the ruling. in contrast to the December upgrade. 

The long-term forecast was raised to 2.0% from 1.8%, while real GDP growth projections were increased to 2.4% for 2026 (from 2.3%) and 2.3% for 2027 (from 2.0%).

The  unemployment rate for 2026 stayed at 4.4%, however it was somewhat raised to 4.3% (from 4.2%) for 2027.

Core PCE inflation revised up from 2.5% to 2.7% for 2026 and from 2.1% to 2.2% for 2027.

The median federal funds rate forecast remained the same, showing one more 25 basis point reduction in 2026 and 2027. However, compared to 11 in the December predictions, 14 participants now anticipate one or no reduction this year.

The decision was approved by 11 of 12 members, with Stephen Miran dissenting in favor of a 25 bps rate cut.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.