Key Takeaways: The Fed cut interest rates by a quarter point, with dissents in the final vote. Expectation for two rate cuts next year, one more than the Fed. Factors like AI boom, tariff policy could affect rate adjustments. Fed chair indicates interest rates are within the neutral range, a key metric for long-term rate predictions.

Division at the US Fed Over Interest Rate Cuts: Two dissents in final rate cut vote. Fed initially expected no cut, but changed course. Powell hints at a pause, wait-and-see approach. Three consecutive rate cuts in 2025, with potential pause in 2026. Fed has cut by 1.75% since 2024, still above pre-pandemic levels.

Should the US Fed Make Larger Rate Cuts in 2026? Fed forecasts one rate cut in 2026, economist predicts two. Factors like AI boom, tariff policy could impact rate adjustments. Uncertainty due to lack of updated data. Housing market weakness may necessitate further rate cuts. Expectation of 75 basis points more in cuts by 2027.

Neutral Interest Rate’s Impact on Inflation and Job Market: Neutral rate stimulates economy for full employment and 2% inflation target. Factors like productivity growth, demographics influence neutral rate. Fed’s target range close to neutral level. Disagreement on neutral rate estimation. Neutral rate seen as crucial for setting interest rates.

Read more at Morningstar: Will US Interest Rates Fall More in 2026? Our Latest Forecast