The Federal Reserve predicts a rate hike in 2026 and maintains interest rates unchanged in 2027

The median forecast of the Federal Reserve's dot plot shows that interest rates will be raised once this year, remain unchanged in 2027, decrease in 2028, and remain between 3.5% and 3.75% in 2029. The Federal Reserve has raised its long-term expectation for the federal funds rate to 3.2%, with a June forecast of 3.1%. 18 out of 19 policy makers submitted interest rate outlook forecasts, but Federal Reserve Chairman Kevin Walsh did not provide specific forecasts. The Federal Reserve's forecast shows an overall higher inflation rate this year and in the coming years. (Source: Jin Shi) AI interpretation: The Federal Reserve clearly conveyed its policy stance of maintaining high interest rates in the long term through a dot matrix, completely breaking the market's illusion of rapid interest rate cuts in the short term. The rise in the interest rate path directly reflects the decision-makers' high vigilance towards inflation stickiness, and this hawkish guidance will force the market to reprice asset valuations. The upward adjustment of long-term interest rate expectations marks a more prolonged tightening cycle of monetary policy, which poses a sustained pressure on risk assets. The decision-making level has announced to the market their firm determination to combat inflation by adjusting the expected end point of interest rates, and a high interest rate environment will become the norm in the coming years.