The US Federal Reserve dot plot suggests a 'cautious' stance on interest rate cuts

AirdropHunterWang · 2026-01-28T13:02:10+00:00

The Federal Reserve's December dot plot indicates a potential 0.5% reduction in interest rates next year, with a shift toward two rate cuts instead of four. This suggests a more cautious stance from the Fed, influencing future market directions.

AirdropHunterWang

2026-01-28 13:02:10

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The U.S. Federal Reserve (Fed) revealed the outline of next year’s interest rate policy through the December dot plot. The dot plot visualizes FOMC members’ interest rate projections, and according to this result, the next year’s base rate is expected to be lowered by an additional 0.5% from the current level.

The key point to note is the pace of the cuts. In September, four rate cuts were projected, but this time the dot plot has been adjusted to two. This indicates that the Fed’s policy stance has become more cautious. This is why the market is interpreting it as a ‘hawkish rate cut.’

The Fed lowered the base rate by 0.25% and also released the dot plot projections. Considering inflation and economic indicators, this decision is expected to serve as a signal for the direction of the financial markets next year.

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