The Fed might not cut interest rates for a while. Here are 5 things we’re watching.
View original at finance.yahoo.comThe Fed might not cut interest rates for a while. Here are 5 things we’re watching…
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Unemployment rate expected to edge up to 4.5% by the end of 2026
80% confidenceThe labor market has stabilized, and they need to keep policy a bit restrictive to help inflation move back down to 2%. It's a good time to wait.
80% confidenceThe Fed is in a very good position to hold for a while and see how the economy actually evolves
80% confidenceMortgage rates in 2026 could fluctuate between a low of 5.7% and a high of 6.5%
80% confidenceEmployers expected to add just 64,500 jobs per month on average over the next year
80% confidenceIt's not as vibrant of a labor market as you'd like, but that's because of the policies that have been put onto this economy, not anything a Fed tool like the fed funds rate can address. In an environment this difficult to read, I don't think it's very unusual or surprising that you'd have different views. If everyone agreed, I'd be worried they're not working at things as robustly as they should.
80% confidenceBefore restarting rate cuts, policymakers are likely to say they want to see convincing evidence that either inflation is retreating back to 2% or that the labor market is starting to lose more steam
80% confidenceMortgage rates are a focal point for both aspiring and current homeowners, and they are also an area of interest for the White House. There is little the Federal Reserve can do to push these borrowing rates meaningfully lower.
80% confidenceSome of the forces weighing on the labor market — like stricter immigration or tariffs — may be beyond the Fed's reach
80% confidenceS&P 500 expected to climb another 12% in 2026
80% confidenceThree Fed rate cuts worth 0.75 percentage points expected in 2026
80% confidence