Fed cuts pushed back
- Markets assign about 98–100% odds that the Fed will hold rates at 3.50–3.75% at the April 28–29 FOMC meeting. (x.com) - Reuters reports economists now see the first rate cut shifting to late 2026 because war‑related inflation risks persist. (reuters.com) - Polls and surveys show a majority of economists expect rates to remain unchanged through September, tightening near‑term borrowing outlooks. (invezz.com)
Investors now expect the Federal Reserve to leave interest rates unchanged next week, with the first cut pushed back toward late 2026. (federalreserve.gov) (money.usnews.com) The Fed’s next policy meeting runs April 28-29, with the decision due at 2 p.m. Eastern on Wednesday, April 29, followed by Chair Jerome Powell’s press conference at 2:30 p.m. Eastern. CME FedWatch showed markets pricing roughly 99% odds of no change in the current 3.50%-3.75% target range. (federalreserve.gov) (cmegroup.com) A Reuters poll conducted April 17-21 found 56 of 103 economists expect the benchmark rate to still be at 3.50%-3.75% at the end of September. Reuters reported economists now see the first rate cut coming no earlier than late 2026 as war-driven energy costs lift inflation risks again. (money.usnews.com) (aol.com) That is a sharp shift from earlier this year, when Reuters said most economists still expected a cut by the end of June in an early-March poll. By late March, nearly 70% were still looking for at least one reduction by September. (money.usnews.com) (newsbreak.com) The reason is straightforward: the Fed cuts rates when inflation is cooling and growth is weakening, but higher oil and fuel prices can push inflation back up before that happens. Reuters said the nearly two-month war in the Middle East has driven fuel prices higher, hurt consumer confidence and erased much of the market’s earlier expectation for near-term cuts. (money.usnews.com) (investopedia.com) Holding rates at 3.50%-3.75% keeps borrowing costs elevated across mortgages, credit cards and business loans because the federal funds rate influences the broader cost of credit. Bankrate’s April survey separately found economists still expected only modest declines in mortgage rates and Treasury yields even as they revised up inflation and unemployment expectations. (baltimoresun.com) Not every survey points to a full-year freeze. Invezz reported that 71 economists still expected at least one cut before year-end, even as about one-third now saw rates staying unchanged through all of 2026. (invezz.com) That leaves next week’s meeting focused less on whether the Fed moves and more on whether Powell signals that inflation risks from energy prices are delaying any cut deeper into 2026. (investopedia.com)
