Fed expected to hold rates through 2026 as inflation stays
A Reuters poll of economists shows a strong majority now expects the Federal Reserve to maintain interest rates at 3.50-3.75 percent for the remainder of the year. Persistent war-driven inflation and a strong labor market have effectively ended expectations for rate cuts in the near term.
The United States Federal Reserve will maintain interest rates at 3.50%-3.75% through the end of 2026 as war-driven inflation persists. A Reuters poll of 102 economists conducted June 4-9 shows 72 respondents, or roughly 70%, now expect no cuts this year. This represents the first clear consensus on steady rates in 2026, up from just under 50% in May.
### Inflation Pressures Harden Fed Resolve Consumer price inflation likely climbed to a more than three-year high of 4.2% last month, according to a separate Reuters survey. Core inflation is projected at 2.9%, while the Personal Consumption Expenditures Price Index rose to 3.8% in April. These figures sit above the 2% target, driven by Middle East war-related energy shocks that have proven more persistent than previously anticipated.
