The Federal Reserve issues interest rate decision and unexpected changes in future forecasts

The American Federal Reserve announced the interest rate was held steady at 4.5% as many expected, and it raised its forecasts for interest rates at the end of 2026 and 2027.

The target interest rate at the end of 2025 was maintained at 4%, indicating expectations of two cuts during 2025. Meanwhile, the forecast for the cut at the end of 2026 dropped to 3.6% instead of 3.4%.

At the end of 2027, it is expected to be 3.4% instead of 3.1%. The long-term interest rate is projected to be at 3%, which is 150 basis points lower than the current level.