The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday.
Capital Economics and other Wall Street firms described the decision as a “hawkish rate cut,” with the Fed opposing more aggressive rate cuts in 2026.
“The new Summary of Economic Projections (SEP) shows the FOMC still expects another rate cut next year, but even if we exclude Stephen Millan’s extreme view, the range of forecasts is unusually broad,” Capital Economics economist Stephen Brown wrote in a note to clients. “In any case, we doubt the Fed will cut rates again until a new chairman replaces Jerome Powell in May.”
The Fed is expected to cut interest rates again next year, according to the latest dot plot and Summary of Economic Projections (SEP) released on Wednesday.
In addition to Stephen Miran’s call for a 50 basis point rate cut, two other dissenters, Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee, both want no rate cut at this meeting.
Brown added: “Given this disagreement, it is not surprising that the statement marks a pause, noting that the FOMC will now consider ‘the extent and timing of additional adjustments to the target range.'”