The Federal Reserve's preferred inflation gauge is projected at 2.3% for 2026, still above the central bank's 2% target. The Fed has held its federal funds range at 3.5% to 3.75% since the start of the year, and markets now read the elevated reading as a sign rate cuts will wait.
The Fed's preferred inflation measure, the PCE price index, is projected at 2.3% for 2026 — above the central bank's long-term 2% target, according to a Bloomberg Markets report. Market participants are reading the gap as a signal the Fed may delay any interest rate cuts.
Policymakers have kept the federal funds target range at 3.5% to 3.75% since the beginning of the year, a stance the report describes as cautious. The central bank has made no adjustment so far, and markets are pricing in a lower probability of imminent cuts as a result.
Observers should track the upcoming Federal Open Market Committee meetings scheduled through October 2026 for any shift in tone. Unemployment data and the PCE index itself remain the key inputs the Fed watches. A clear move toward the 2% target, or a shift in employment figures, could change market pricing on when cuts start.
Source: Crypto Briefing
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