Survey Projects: The Federal Reserve May Still Plan to Lower Interest Rates Later This Year

Golden Ten Data, March 26 – According to a Reuters survey, economists believe the Federal Reserve will keep interest rates unchanged until September. However, despite ongoing concerns about inflation sparked by the Middle East war, these economists still expect at least one rate cut later this year. In contrast, financial markets have completely ruled out the possibility of a rate cut this year and consider the probability of a rate hike as high as nearly 30%. The ongoing war between the US, Israel, and Iran has lasted for four weeks, leading to a rise in crude oil prices of over 40%. Economists expect the impact of this energy shock to be more limited and short-lived. In the Reuters survey, economists' predictions on interest rate levels by the end of 2026 diverged significantly and roughly fall into four categories: 28 expect one rate cut, 37 expect two rate cuts, 13 anticipate rates will remain unchanged this year, and 4 forecast three rate cuts.