International Monetary Fund: Limited room for the Federal Reserve to cut interest rates by 2026

Deep Tide TechFlow news. April 2, according to Jintou data, the International Monetary Fund said that although U.S. inflation is expected to ease to the Federal Reserve’s 2% target in the first half of next year, policymakers this year have virtually no room to cut rates. Based on the IMF’s annual assessment of the U.S. economy, IMF staff expect that by the end of 2026 there may be only one opportunity to cut rates. “Overall, staff believe there is limited room for policy rates to be lowered over the next year. More substantial monetary easing would need to be based on the premise that the outlook for the labor market significantly deteriorates and that inflation pressure does not increase; inflation expectations may rise given recent increases in oil prices and commodity prices.” The IMF’s executive director said in a separate statement that, given the Federal Reserve’s current policy is close to neutral, “there is limited room to cut rates in 2026, especially considering the pass-through effects of higher energy prices, core inflation, and upside risks in global commodity prices, which may further delay the achievement of the inflation target.”