Fed Halts Easing Cycle as Markets Price Zero Cuts Until 2027
The Federal Reserve held rates at 3.50%-3.75% citing Iran conflict uncertainty and oil price spikes, while raising long-term rate projections to 3.1%. Market futures now price no rate cuts until March 2027, a dramatic shift from earlier easing expectations, driven by AI-boosted productivity assumptions and revised growth forecasts.
This hawkish pivot signals a fundamental recalibration of monetary policy expectations, forcing asset repricing across all risk categories and potentially constraining credit-sensitive sectors.
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