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Fitch Ratings: Expects Fed to Cut Interest Rates Twice in First Half of Year, Unemployment Rate to Stay at 4.6% in 2026
Summary: According to sources, Fitch Ratings has raised its GDP growth forecast for the United States in 2025 and 2026. The adjustment comes after incorporating economic data delayed due to the government shutdown at the end of last year. Fitch currently expects GDP growth of 2.1% in 2025, higher than the 1.8% forecast in its December ...
According to sources, Fitch Ratings has raised its GDP growth forecast for the United States in 2025 and 2026. The adjustment comes after incorporating economic data delayed due to the government shutdown at the end of last year. Fitch currently expects GDP growth of 2.1% in 2025, higher than the 1.8% forecast in its December 2025 Global Economic Outlook (GEO). Additionally, the growth forecast for 2026 has been raised from 1.9% in the previous report to 2.0%. Due to incomplete data in October, recent CPI inflation trends are difficult to interpret. It is estimated that inflation rose to 3.0% in December 2025 (from 2.7% in November), and is expected to further increase in 2026, reaching 3.2% by the end of the year due to delayed tariff pass-through effects. Despite the slowdown in job growth being offset by a decrease in labor force growth, the average unemployment rate in 2026 is expected to be 4.6%, close to recent levels. It is anticipated that the Fed will cut interest rates twice in the first half of 2026, lowering the federal funds rate (upper limit) to 3.25%.
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Link: Fitch Ratings: Expects Fed to Cut Interest Rates Twice in First Half of Year, Unemployment Rate to Stay at 4.6% in 2026 [Copy]
