Fed Likely to Keep Rates High
Polls expect the U.S. Federal Reserve to keep the base interest rate unchanged throughout 2026, despite ongoing inflation. There is a likelihood of two rate hikes by the end of March 2027 due to pressures from a roughly 25% increase in oil prices resulting from regional tensions. The Fed chair indicated a focus on returning inflation to the targeted 2%, with expectations of no change in interest rates between 3.50% and 3.75% until the end of the year. Over 70% of analysts also do not anticipate any adjustments before the end of 2026. Unemployment rates are expected to remain around 4.2%, and economic growth steady at an average of 2%. Current monetary policies are aimed at maintaining the status quo to build confidence, despite the Personal Consumption Expenditures Price Index remaining above the target for the coming years.
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