The Federal Reserve cut interest rates as expected Wednesday, but that’s where the clarity ends. Fed officials’ own (anonymized) forecasts show a near-complete breakdown of the consensus that Chair Jerome Powell has worked hard to hold together against escalating White House pressure and economic diagnoses that demand competing cures.
“This is wild,” Navy Federal economist Heather Long wrote of the “dot plot” that shows where Fed officials think rates should be at the end of the year and onward. A third of officials want to hold steady, half of them want two cuts of 0.25 percentage points, two want one such cut, and one (presumably Trump’s newest appointee, Stephen Miran) wants the equivalent of five. One official wants to raise rates from here — a move that would spook the markets by signaling deep concerns about an economic slowdown.
This is what consensus breakdown looks like:
