Budget office expects Federal Reserve to cut rates in 2026
abcnews.go.com••business
Key Points:
- The Congressional Budget Office (CBO) projects the Federal Reserve will cut short-term interest rates in 2026, with the key rate reaching 3.4% by 2028 during President Trump's term.
- Despite these cuts, the yield on 10-year Treasury notes is expected to rise from 4.1% in late 2025 to 4.3% in 2028, indicating potentially higher mortgage borrowing costs.
- Unemployment is forecasted to peak at 4.6% in 2026 before declining to 4.4% in 2028, influenced by Trump's tax and spending policies and reduced immigration.
- Real GDP growth is projected to increase to 2.2% in 2026,
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