- Economists expect U.S. inflation to hit the Federal Reserve's target early next year, with the unemployment rate set to rise slightly, following the central bank's updated forecasts released last week.
- The Fed is targeting price growth of 2% based on the annualized personal consumption expenditures price index, and economists in the latest monthly Bloomberg survey see the index hitting that pace on average during the first quarter. In August, they expected the index to hit the Fed's target in the second quarter.
- In conjunction with last week’s rate cut, Fed officials also released updated economic projections. While the forecasts are not quarterly, they show the average personal consumption expenditures measure is projected to reach 2.1% in 2025, then fall to 2% the following year.
- The Federal Reserve's preferred measure of U.S. core inflation and household spending rose slightly in August, reflecting a slowing economy.
- Federal Reserve Chairman Jerome Powell said the US central bank was not in a hurry to cut interest rates, noting that he did not see signs of recession risk in the US economy.
- Economists expect a series of rate cuts that would put the Fed's funding rate in a range of 3% -3.25% by the December 2025 meeting, representing 1.25 percentage points of cuts over the next year, while Fed officials had forecast a one-point cut.
- Average GDP is expected to reach 1.8% in 2025 after being projected to reach 2.6% this year, while the Federal Reserve expects GDP to remain at 2% from 2024 to 2026.
