· Event impact
Fed projects 3.8% rates by year-end amid 3.6% inflation forecast
Transmission path
Higher for longer rates via persistent inflation expectations and resilient labor data.
Market mechanism
Higher for longer rates via persistent inflation expectations and resilient labor data.
Extended read
The Federal Reserve's latest economic projections have shifted the market's focus back to persistent price pressures. With inflation now expected to hold at 3.6% through 2026, the central bank has signaled that interest rates will likely need to reach 3.8% by the end of the year. Despite the hawkish rate path, the Fed highlighted that the underlying economy remains on solid footing, citing strong productivity and stable employment levels as justifications for maintaining a restrictive stance.
Exposed assets
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