FOMC shifts hawkish
The FOMC revised its projections upward—PCE inflation is now forecast at 2.7% for 2026 (was 2.4%) and GDP growth to 2.4%—signalling a 'higher for longer' interest-rate outlook even as unemployment stays steady. That adjustment tightens the macro backdrop quants and risk teams must bake into models and scenario analysis. (x.com)
The FOMC’s Summary of Economic Projections shows the median projected federal funds rate at 3.4% at the end of 2026. (prod-i.a.dj.com) The committee voted 11–1 to hold the target range for the federal funds rate at 3.50%–3.75% at the March meeting. (cnbc.com) The Fed’s “dot plot” still implies about one 25-basis-point reduction this year and another in 2027, and only 7 of 19 participants signaled rates would remain unchanged through the year. (cnbc.com) The SEP preserves a relatively tight dispersion for terminal rate forecasts—median 3.4% with a central tendency band roughly 2.9%–3.6% for 2026 in the table of projections. (prod-i.a.dj.com) Unemployment projections were essentially unchanged, with the SEP’s fourth‑quarter‑2026 unemployment projection centered at 4.4% and a longer‑run estimate near 4.2%. (prod-i.a.dj.com) Fed Chair Powell highlighted the uncertain implications of the recent Middle East conflict and higher oil prices for near‑term inflation, a risk the committee said could keep inflationary pressure elevated. (cnbc.com)
