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Budget office expects Federal Reserve to cut rates in 2026

The Congressional Budget Office forecasts unemployment peaking at 4.6% in 2026 and 10-year Treasury yields rising to 4.3% by late 2028 despite Fed rate cuts.

  • The Congressional Budget Office expects the Federal Reserve to cut short-term interest rates in 2026, with the key rate settling at 3.4% by the end of President Donald Trump's term in 2028.
  • The CBO projects jobless rates to increase before improving, peaking at 4.6% in 2026 and easing to 4.4% in 2028, affected largely by Trump's tax and spending policies and fewer migrants.
  • GDP growth is projected to rise to 2.2% in 2026 before slowing to 1.8% in 2027-2028 as fiscal support wanes and labor force growth slows, according to the CBO.
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Budget office expects Federal Reserve to cut rates in 2026

The Congressional Budget Office has released new economic projections, expecting the Federal Reserve to cut short-term rates in 2026.

·United States
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The U.S. Federal Reserve will likely cut interest rates a little more this year to “address recessionary risks to the labor market,” the U.S. Budget Office forecast on Thursday… Congressional Budget Office Forecast: Fed to Cut Interest Rates Slightly This Year - ΙΝΑΦΤΕΜΟΠΟΡΙΚΙ

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Winnipeg Free Press broke the news in Winnipeg, Canada on Thursday, January 8, 2026.
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