Interest rates are likely to edge lower in 2026 as the Fed weighs inflation, jobs and political pressure. See what forecasts suggest for the year ahead.

Looking ahead to 2026, the Fed’s own median projection or “dot plot” suggested there would be only one additional 25 basis points cut. This would move the rate to around 3.25% to 3.50% by year end. Market expectations are slightly more dovish, calling for two rate cuts, which would push rates closer to 3%.

Williams is one of many Fed officials who have said the central bank can afford to wait for more data before considering whether to lower interest rates again.

See how low your current mortgage rate offers are here.

Much of the discussion around financial markets continues to shift from one macro concern to another. Whether it’s higher for longer interest rates (or simply overall Federal Reserve monetary policy),

President Trump has long complained that interest rates are too high. Experts say he's not doing himself any favors with his pressure campaign against the Federal Reserve.

The Federal Reserve delivered Wall Street the holiday gift of a rate cut late last year, but policymakers seem to think that’s sufficient for the time being. Expert projections show that the most likely outcome is a total of two rate cuts in 2026, down from three last year.

JP Morgan no longer expects Fed rate cuts in 2026, now forecasting a 2027 hike. Goldman Sachs and Barclays delay cut predictions.

In 2026 the FOMC is expected to move interest rates slightly lower, with perhaps one or two cuts on current estimates.