Federal Reserve 2026 Economic Outlook: Steady Growth with No Room for Rate Cuts, When Will Inflation Truly Warm Up?

【Chain Wen】The President of the New York Federal Reserve recently stated that the U.S. economy will remain healthy in 2026, and there is no need for further rate cuts in the short term. What does this mean? Simply put, the Federal Reserve is satisfied with the current policy stance.

He pointed out that the federal funds rate has been adjusted from a restrictive stance to a level close to neutral, which now helps stabilize employment and lower inflation. In other words, money is no longer tight, but not loose either.

There are two details in this speech worth noting: first, there are recent signs of cooling in the labor market, with an increased risk of unemployment; second, inflationary pressures are easing. Under these circumstances, the Federal Reserve certainly won’t rush to cut rates again — it needs to protect employment from getting out of control while also preventing inflation from losing its restraint.

The specific economic outlook is as follows: this year’s GDP growth is expected to be between 2.5% and 2.75%, with the unemployment rate gradually stabilizing and then decreasing, only returning to a more comfortable level by 2027. Regarding inflation, it may peak in the 2.75%-3% range in the first half of the year, with an average for the year expected to fall back to 2.5%, ultimately approaching the 2% target by 2027.

For traders, the implicit signal in this outlook is: interest rates are unlikely to move in the short term, and the Federal Reserve will wait for clearer data signals. How will this affect cryptocurrency prices? That depends on how the market interprets the attitude of “pausing rate cuts.”