Fed Expected to Pause Interest Rates Through 2026 Amid Rising Hike Risks
The Federal Reserve is widely expected to keep the Federal Funds Target Rate at 3.50%-3.75% when it meets in July, according to UOB Global Economics & Markets Research.
This aligns with Bloomberg consensus expectations and reflects a prolonged pause in monetary policy tightening.
UOB's base case is for an extended pause through 2026, with easing only resuming in the second and fourth quarters of 2027 as transitory inflation pressures subside.
However, the bank notes that rising risks of further rate hikes have increased due to oil and geopolitical developments.