Federal Reserve (FED) · Bangkok Post
Fed split clouds rate forecasts
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The Federal Reserve's latest moves have reinforced expectations that borrowing costs may remain stable throughout the second half of 2026, though a sharp divide among policymakers highlights the ongoing uncertainty surrounding inflation and the future path of monetary policy, pundits say.
Key facts
- The US central bank left its benchmark interest rate unchanged at 3.50-3.75% following its meeting this week, yet almost half of its policymakers said they could support a rate hike later this year.
- The Federal Reserve's latest moves have reinforced expectations that borrowing costs may remain stable throughout the second half of 2026, though a sharp divide among policymakers highlights the ongoing uncertainty surrounding inflation
- Nine Fed officials favoured keeping rates unchanged, while another nine supported at least one additional rate hike this year to bring inflation closer to the central bank's 2% target.
- Kobsak Pootrakool, senior executive vice-president of Bangkok Bank and chief economist of its research centre, said the latest dot plot projection of a 3.8% year-end policy rate should not necessarily be interpreted as the beginning of
- Shares of Meta fell 5.4%, while Microsoft lost 3.7%, contributing to a broader decline in the Nasdaq as investors reassessed growth valuations under a potentially higher-for-longer rate environment.
- The S&P 500 Index fell 1.21%, pressured by the Federal Open Market Committee's statement, which struck a hawkish tone as it indicated the US economy remained resilient despite the impact of the war, while key inflation readings continued
Summary
The US central bank left its benchmark interest rate unchanged at 3.50-3.75% following its meeting this week, yet almost half of its policymakers said they could support a rate hike later this year.
Nine Fed officials favoured keeping rates unchanged, while another nine supported at least one additional rate hike this year to bring inflation closer to the central bank's 2% target.