Federal Reserve officials now expect higher interest rates through 2028, signaling a slower pace of cuts than previously projected.
Federal Reserve policymakers raised their median interest rate projection for the end of 2026 to 3.8%, up from 3.4% in March, according to the latest dot plot. The shift suggests a more gradual easing cycle amid persistent inflation concerns.
In March, the Fed had penciled in one rate cut in 2026 to 3.4% and another in 2027 to 3.1%. The updated projections show 3.6% at the end of 2027 and 3.4% by 2028, both above prior estimates. The skew in expectations also narrowed, with fewer officials forecasting deeper cuts.
The revisions reflect a more cautious outlook on inflation and economic resilience, potentially delaying monetary policy normalization.