Macquarie cuts its forecasts for Fed rates after regulator's recent report

According to Investing.com, the Federal Reserve (Fed) on Wednesday reaffirmed plans for two rate cuts this year, despite revising its inflation forecast upward. Analysts at Macquarie view this as evidence of a shift in the regulator's attitude toward changes in economic indicators. The firm has also revised its earlier projections that anticipated no borrowing cost reductions this year, now expecting a rate cut in December.

The central bank maintained interest rates at 4.5%, consistent with its median 2025 forecast.

During the press conference, Fed Chair Jerome Powell identified key sources of uncertainty for the US economy: trade, immigration, fiscal policy, and regulation. The official noted that President Donald Trump's tariffs complicate forecasting the Fed's future policy trajectory.

Regarding labor market conditions, Powell described them as "generally balanced" with only marginal changes. Updated Fed projections show unemployment rising to 4.5% by end-2025, with real GDP growth slowing to 1.4% in 2025 and 1.6% in 2026.