Nearly half of Federal Reserve policymakers no longer believe that keeping borrowing costs steady would be enough to bring inflation back to the 2% target if oil prices surge after the Iran war, foreign media analysis said.
According to Jin10, the Fed’s latest dot plot showed that the internal debate has shifted quickly from how long to hold rates unchanged before cutting to growing concern about the need for rate hikes, with some officials saying they were convinced the Fed would need to raise rates.
Forecasts released on Wednesday indicated that since March, policymakers have become more pessimistic about inflation, reflecting a sharp rise in inflation since the outbreak of the war. The median projection showed year-end year-over-year PCE inflation at 3.6%, compared with a March projection of 2.7%. Median core PCE inflation was seen at 3.3% by year-end, versus 2.7% projected in March.
The median forecast also put the year-end unemployment rate at 4.3%, matching the May actual reading and below the 4.4% projected in March. The analysis said this suggested policymakers increasingly believed the labor market had not weakened and did not require support through rate cuts.
Fed Policymakers Turn More Hawkish as Inflation Outlook Worsens, Report Says
2026-06-17 18:28:48
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