📝See Lower Median Fed Funds Rate Projections For 2025/2026: Wells Fargo

The lower median projections for the fed funds rate in 2025 and 2026 could be fostered by a more dovish composition of the Committee if Stephan Miran is confirmed in time to participate in the September meeting. However, the more significant driver, in our view, is the combination of greater risk to employment amid a generally stable outlook for inflation the past few months despite ongoing uncertainty around the inflationary impact of changes to tariff policy (Figure 6). We anticipate the median Q4/Q4 estimates for headline and core PCE inflation in 2025 will remain unchanged in the September SEP at 3.0% and 3.1%, respectively. The inflation estimates for 2026 may tick up a tenth or so as the slow adjustment to tariffs keeps inflation elevated slightly longer, although at around 2.5%, that would still leave inflation making strides back toward the Committee's target next year. - Wells Fargo