Federal Reserve Chair Jerome Powell will speak with reporters following the usual Federal Open Market Committee meeting held at the Fed in Washington, DC on July 30, 2025.
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The Federal Reserve is forecasting only one fee cut in 2026, depending on the median forecast.
The so-called dot plot of the central bank shows the expectations of 19 individual members anonymously, giving a median estimate of federal funding rates for the end of 2026. This is compared to the median estimate of 3.6% at the end of this year, following two expected cuts in the decline on Wednesday.
Next year’s single quarterly point cut is much more conservative than current market prices. According to CME Group’s FedWatch tool, traders are currently priced at two or three more rate cuts next year. Updated immediately after decision. Gauge uses the price of a 30-day interest rate futures contract to determine the market-proven odds of the Fed’s movement.
This is the Fed’s latest target from both voters and non-voters FOMC members.
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However, the forecast shows a huge difference in opinion, with two voting members seeing a cut of up to four times in 2026. Next year, three staff members tightened their pencils with three fee cuts.
“Next year’s dot plot is a mosaic of different perspectives and accurately reflects the muddy, disruptive economic outlook due to changes in labor supply, concerns about data measurement, and rapid changes and uncertainties in government policies.”
The Central Bank has two policy meetings this year. One takes place in October and the other in December.
Updated economic forecasts from the Fed show slightly faster economic growth in 2026 than was forecast in June, but the outlook for inflation next year is modestly high.
In 2026, there is a lot of uncertainty about the central bank, including a replacement for Federal Reserve Chairman Jerome Powell, whose May 2026 term expires.
