Fed Hawkish Pivot Pushes Rate Cut Timeline to March 2027
The Federal Reserve held rates at 3.5%-3.75% while projecting only one quarter-point cut for 2026, driven by Iran conflict uncertainties and oil price spikes. Markets now price no rate cuts until March 2027, with the longer-run federal funds rate outlook raised to 3.1%, signaling a fundamental shift toward prolonged restrictive policy.
This hawkish recalibration extends the high-rate environment another year, pressuring leveraged sectors and potentially accelerating credit stress in an already vulnerable private credit market.
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interest rates
monetary policy
inflation