The Congressional Budget Office predicts that the Federal Reserve will cut interest rates slightly this year.
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TL;DR
The Congressional Budget Office predicts the Federal Reserve will slightly cut interest rates this year to address labor market risks, with rates expected to drop to 3.4% by Q4 and remain stable until 2028.
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Congressional Budget OfficeFederal Reserveinterest rateslabor marketinflation
According to ChainCatcher, citing Jinshi, the Congressional Budget Office (CBO) predicted on Thursday that the Federal Reserve may further cut interest rates slightly this year to address downside risks in the labor market. The CBO indicated that it expects interest rates to fall to 3.4% in the fourth quarter and remain at that level until 2028. Meanwhile, the CBO predicts that the US unemployment rate will fall to 4.6% this year, while the Fed's preferred PCE inflation rate will fall to 2.7%.