Will the Federal Reserve Raise or Lower Interest Rates in 2026? Here's What the Data Suggests.
Hopes for more interest rate cuts have fizzled out.
Will the Federal Reserve Raise or Lower Interest Rates in 2026? Here's What the Data Suggests.
Overview
The Federal Reserve's interest rate decisions have a major impact on the markets. When it raised its benchmark rate 11 consecutive times in 2022 and 2023, from nearly 0% to 5.25%-5.50%, many stocks crumbled. But when it reduced its rates six consecutive times in 2024 and 2025, ending at a range of 3.50%-3.75%, many of those stocks bounced back.
However, the Fed has left its benchmark rate unchanged through four Federal Open Market Committee (FOMC) meetings this year, even after Kevin Warsh succeeded Jerome Powell as the new Federal Reserve Chairman on May 22. Warsh's decision to keep interest rates steady during the mid-June FOMC meeting didn't surprise investors. Still, he also stopped the Fed from providing any forward guidance and refused to submit his own interest rate projections.
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Originally published at www.fool.com.
