UOB analysts forecast a prolonged pause through 2026, with two rate cuts in 2027 amid persistent inflation risks.
The Federal Reserve maintained its Fed Funds Target Rate at 3.50%-3.75% for a fifth consecutive meeting, despite three dissenting votes favoring a 25-basis-point hike. The 9-3 decision reflects growing division within the FOMC as inflation remains above target.
Analysts expect the Fed to extend its policy pause through 2026, with two rate cuts projected in 2027. The absence of forward guidance shifts focus to upcoming economic data, particularly inflation reports, to shape market expectations.
The next FOMC meeting is scheduled for September 15-16, 2026, and will include an updated Summary of Economic Projections and Dotplot chart.