The Fed Sees Higher Inflation Coming - And May Cut Rates Anyway

American Institute For Economic Research2.15K FollowersFollow5ShareSavePlay(8min)CommentsSummaryThe Federal Open Market Committee (FOMC) held interest rates steady on Wednesday, keeping its target range at 3.5 to 3.75 percent.The real story of this meeting isn’t what the FOMC did. It’s what its members’ projections reveal about their willingness to tolerate above-target inflation indefinitely.The updated Summary of Economic Projections puts the median FOMC member’s PCE inflation projection at 2.7 percent for 2026.The median projection for the federal funds rate remains at 3.4 percent at year-end and 3.1 percent at the end of 2027. Shutthiphong Chandaeng/iStock via Getty Images By Bryan Cutsinger Inflation is well above two percent, but rate paths haven’t moved. The disconnect suggests a shift in how much inflation the Fed is willing to tolerate.

The Federal Open Market Committee (FOMC) This article was written byAmerican Institute For Economic Research2.15K FollowersFollowAIER educates Americans on the value of personal freedom, free enterprise, property rights, limited government and sound money. Our ongoing scientific research demonstrates the importance of these principles in advancing peace, prosperity and human progress. www.aier.orgFounded in 1933, AIER is a donor-based non-profit economic research organization. We represent no fund, concentration of wealth, or other special interests, and no advertising is accepted in our publications. Financial support is provided by tax-deductible contributions, and by the earnings of our wholly owned investment advisory organization, American Investment Services, Inc. (https://www.americaninvestment.com/)