Will the Federal Reserve cut rates before 2027?

3/ She prefers "smaller, more frequent" moves to avoid bigger hikes later. Her neutral-rate estimate is among the Fed's highest, and she says if she's wrong, it's too low. Also, higher yields are "absolutely not" a substitute for Fed hikes https://www.wsj.com/finance/investing/beth-hammack-cleveland-fed-inflation-7751c731?st=zKLzjV&reflink=desktopwebshare_permalink

2/ Her take: Yes, rate hikes won't open the Strait of Hormuz or immediately slow the data-center buildout. But they might make other firms "think twice" about expanding in this environment, leaving scarce parts or supplies to data centers and easing pressures at the margins.

Fed governor Chris Waller on verbal guidance to shape expectations of the near-term rate path: "There's a role for it when you need it.... I can't think of anything that's more forward guidance than what happened last week."

Treasury Secretary Scott Bessent tells Fox's @IngrahamAngle that he hopes the Fed will keep an "open mind" on rate hikes and consider the example of the 1990s and Greenspan. What's interesting about this oft-cited analogy is that there's the 1996-97 Greenspan who resisted hiking when some of his colleagues wanted it. But there's also the 1999-2000 Greenspan Fed that raised rates by 175 bps in 12 months (including a 50-bps hike in May 2000), which more than reversed the 75 bps in cuts that followed the LTCM meltdown in 1998. Ingraham nods to this history: "We did have the internet boom in 2000 and bust as well, didn't we?"

Waller: “I anticipate additional hikes to support a timelier return of inflation to our 2% goal. But there is some flexibility about when those hikes will occur. The hikes do not need to come at consecutive meetings, but they should be in place in an acceptable period of time.”

Fed minutes: “With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end.” https://www.federalreserve.gov/monetarypolicy/fomcminutes20260916.htm

We have posted the minutes from the #FOMC meeting held September 15-16, 2026: https://www.federalreserve.gov/newsevents/pressreleases/monetary20261007a.htm

Our September 2026 Survey of Consumer Expectations shows that households’ inflation expectations increased at the short- and medium-term horizons and remained unchanged at the longer-term horizon. Labor market expectations mostly improved with unemployment rate, job finding, job loss, and quit expectations all improving.