Fed Leaves Rates Unchanged, Projects One Cut in 2026

Core Insights - The committee indicates uncertainty regarding the implications of Middle East developments on the US economy, while remaining attentive to risks associated with their mandate [1] - A forecast for one more interest rate cut is anticipated in 2027 [1] Economic Projections - The Personal Consumption (PC) inflation forecast for this year is revised to 2.7%, an increase from the previous estimate of 2.4% in December [2] - Core inflation is also projected at 2.7% for this year, up from 2.5% [2] - The GDP growth forecast has been adjusted upward by 0.1% for both this year and next year, now estimated at 2.4% and 2.3% respectively [3] - The unemployment rate forecast for 2026 remains at 4.4%, with a slight decrease to 4.3% expected next year, up from 4.2% in December [3] - The longer-run estimate for the Federal funds rate, viewed as a proxy for the neutral rate, has increased to 3.1% [3]