{"id":1488,"date":"2026-06-09T16:10:09","date_gmt":"2026-06-09T16:10:09","guid":{"rendered":"https:\/\/reliablemovingcrews.com\/?p=1488"},"modified":"2026-06-09T16:10:09","modified_gmt":"2026-06-09T16:10:09","slug":"fed-to-hold-rates-this-year-cut-calls-fade-as-war-inflation-persists-economists-say-reuters-poll","status":"publish","type":"post","link":"https:\/\/reliablemovingcrews.com\/?p=1488","title":{"rendered":"Fed to hold rates this year, cut calls fade as war inflation persists, economists say: Reuters poll"},"content":{"rendered":"
BENGALURU, June 9 (Reuters) – The U.S. Federal Reserve will hold its key interest rate for the rest of 2026, according to a strong majority of economists in a Reuters poll, the first clear consensus on that view this year as war-driven inflation \u200bproves more persistent than expected.<\/div>
Interest rate futures have gone a step further, pricing in at least one rate hike by end-2026. A blowout \u200cMay jobs report on Friday helped put to rest the case for rate cuts.<\/div>
Inflation has risen to roughly double the Fed’s 2% target, with little prospect of a quick retreat after more than five years of elevated price pressures, even as economic activity remains steady.<\/div>
Some Federal Open Market Committee members have already floated the possibility that rates may need to rise later \u200bthis year.<\/div>

NEW FED CHAIR<\/h2>
Nearly 70% of economists polled – 72 of 102 – forecast the key rate would stay in its current 3.50%-3.75% range for \u200bthe rest of 2026, up from just under half last month and about a third before that. The survey was \u2060conducted from June 4 to 9.<\/div>
No economist expected a rate cut at the conclusion of the FOMC’s June 16-17 meeting, Fed Chairman Kevin Warsh’s first.<\/div>
“It’s going \u200bto be very hard for the Fed to justify any action at this point and in the foreseeable future. It will be incredibly difficult to get a \u200bconsensus of Fed officials to go along with the idea of cutting rates,” said Tom Porcelli, chief economist at Wells Fargo.<\/div>
“The way we could get there is if we find an exit from the Iran conflict in the very immediate term …. There’s no sense that’s where we’re going with this.”<\/div>
The poll suggests Warsh, nominated by President Donald Trump and under pressure \u200bto lower rates, would struggle to build support for cuts. Many economists expect the Fed to drop its easing bias from this month’s policy statement.<\/div>
Most forecasters \u200bhave pushed rate cut expectations into next year or dropped them altogether. Only a handful see the next move as a hike.<\/div>
Some also expect the Fed’s updated quarterly “dot plot” \u200cforecasts to \u2060signal steady rates this year, with a few pointing to hikes – a shift from March, when one cut was projected.<\/div>
“The risk is more towards more persistent inflation and fewer cuts and possibly hikes than any quick resolution,” said Philip Marey, senior U.S. strategist at Rabobank. “A more optimistic scenario has just flown out of the window.”<\/div>
Consumer price inflation likely climbed to a more than three-year high of 4.2% last month, with core inflation rising to 2.9%, a separate Reuters survey showed. \u200bThe data is due on Wednesday.<\/div>
The Fed’s \u200bpreferred inflation gauge, the Personal Consumption \u2060Expenditures Price Index, rose to 3.8% year-on-year in April, its highest since May 2023. It is forecast to average 3.9%, 3.8% and 3.6% in the second, third and fourth quarters, respectively.<\/div>
Last month, most economists said current inflation pressures – largely driven \u200bby Middle East war-related energy shocks – were likely to be transitory.<\/div>
Central banks initially made similar assessments in 2022, when \u200ba surge in prices \u2060partly triggered by Russia’s invasion of Ukraine ultimately proved persistent and forced one of the most aggressive tightening cycles in decades.<\/div>
“Supply shocks should be one-off and transitory. But if we start getting them in sequences that might start shifting inflation expectations in a way we wouldn’t normally expect,” said Eli Nir, U.S. economist at TD Securities.<\/div>
“They’re \u2060concerned about \u200bsupply shocks turning into more persistent shocks because they were wrong there in 2022. We \u200bwere all wrong at that point.”<\/div>
Forecasts for growth and unemployment were largely unchanged. The jobless rate is seen holding around 4.3% or slightly higher, while economic growth is expected to average about 2% \u200bover the coming years.<\/div>
(Other stories from the Reuters global economic poll)<\/div>