Survey Anticipates: Federal Reserve May Still Plan Rate Cuts Later This Year

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On March 26, a Reuters survey revealed that economists believe the Federal Reserve will maintain interest rates unchanged until September. However, despite ongoing inflation concerns stemming from the Middle East conflict, these economists still expect at least one rate cut later this year. In contrast, financial markets have completely ruled out the possibility of a rate cut this year, with nearly a 30% chance of an interest rate hike instead. The ongoing war between the U.S. and Iran has lasted four weeks, causing crude oil prices to rise by over 40%. Economists anticipate that the impact of this energy shock will be more limited and of shorter duration. The Reuters survey showed significant divergence among economists regarding interest rate levels by the end of 2026, roughly categorizing their predictions into four groups: 28 expect one rate cut, 37 foresee two cuts, while 13 believe rates will remain unchanged this year, and 4 predict three cuts.

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