Reuters poll sees Fed holding rates steady through 2026

Higher borrowing costs are likely to linger for U.S. households and small businesses, keeping pressure on mortgages, credit cards, auto loans and day-to-day financing well after many economists had hoped for cuts. In a Reuters poll conducted June 4 to June 9, 72 of 102 economists said the Federal Reserve’s benchmark rate would stay in the 3.50% to 3.75% range through the end of 2026, a sharp shift toward a higher-for-longer outlook.

None of the economists surveyed expected a rate cut at the Fed’s June 16-17 meeting, which will be the first under Chair Kevin Warsh. The change in expectations reflects an inflation backdrop that has stayed stubborn and a labor market that has remained firm enough to reduce the case for easier policy. Reuters reported that inflation is still running at roughly twice the Fed’s 2% target, while overall economic activity has held steady.

The Fed last left its target range unchanged on April 29 at 3.50% to 3.75%, the lowest since November 2022. In that statement, policymakers said they would carefully assess incoming data, the evolving outlook and the balance of risks before making any further adjustments. The June meeting will bring an updated Summary of Economic Projections and the dot plot, giving investors a fresh look at where officials see rates heading later this year and beyond.

Recent labor data helped harden the wait-and-see view. The U.S. Bureau of Labor Statistics said June 5 that nonfarm payrolls rose by 172,000 in May and the unemployment rate held at 4.3%. Job gains were concentrated in leisure and hospitality, local government and health care, while financial activities declined. That combination suggested the job market remains resilient enough for the Fed to avoid rushing into cuts.

Inflation risks have also been reinforced by broader global pressures. The International Monetary Fund urged caution on June 4, citing persistent upside risks from energy shocks and pass-through from higher tariff costs. Reuters reporting around the poll said interest-rate futures have started to price in at least one rate hike by the end of 2026, underscoring how far the market has moved from expectations of a summer cut.

That leaves households and companies exposed to a prolonged period of tight credit. Mortgage borrowers will keep facing elevated monthly payments, credit-card balances will remain expensive to carry and small businesses will continue to pay more for working capital. For the Fed’s outlook to shift back toward cuts, inflation would need to cool convincingly and the labor market would have to lose enough momentum to give policymakers room to ease without reigniting price pressures.