Overview
- A Reuters poll taken June 23–25 found over three-quarters of economists expect the Federal Reserve to keep the policy rate unchanged for the rest of 2026.
- At the Fed's June 16–17 meeting, new Chair Kevin Warsh and the FOMC raised the median 2026 core PCE inflation projection to 3.3% and the adjusted expected federal funds rate to 3.8%.
- Major banks including Goldman Sachs and J.P. Morgan have moved their rate-cut forecasts into 2027, with some models now pencilling in the first cuts in mid to late 2027.
- Economists point to rising energy prices and lingering tariff-driven costs as the main reasons inflation has stayed above 4%, a pattern that monetary policy alone may struggle to fully erase.
- A higher-for-longer policy makes short-term Treasuries more attractive and raises borrowing costs for households and businesses, which will pressure interest-sensitive sectors and reduce demand for volatile assets such as crypto.