Fed Seen Taking Higher for Longer Stance on Rates -- Market Talk

1543 ET - The Federal Reserve is signaling with its latest rate hike that it thinks rates will need to stay higher for longer to get inflation under control, UBS economist Jonathan Pingle says in a note. Officials clearly expect one more rate hike this year and plan to keep rates around 4.1% through 2027, with very slow rate cuts to follow through 2029, the economist says. By leaving its nominal policy rate at 3.6% at the end its forecast horizon, while inflation returns to 2%, suggests that the Fed think a funds rate over 3.5% is needed to tame inflation, Pingle says. "They have generally rethought the fundamental level of the real funds rate needed to achieve price stability over the next three to four years," he says. (dean.seal@wsj.com)

(END) Dow Jones Newswires

September 16, 2026 15:43 ET (19:43 GMT)