The research team at a European bank has kept its Federal Reserve call unchanged, pointing to US inflation still above the 2% target and an economy that continues to expand at a firm pace. It expects one additional rate rise this year and another in 2027, framing the policy outlook as shaped more by persistent price pressures than by any rapid cooling in activity.
US Inflation And Monetary Policy Outlook
The research team at a European bank has kept its Federal Reserve call unchanged, pointing to US inflation still above the 2% target and an economy that continues to expand at a firm pace. It expects one additional rate rise this year and another in 2027, framing the policy outlook as shaped more by persistent price pressures than by any rapid cooling in activity.
Long-Term Yields, Growth, And Fed Response
The bank also argues that long-term US Treasury yields above 5% are better explained by robust nominal GDP growth and heavy capital demand than by a turn towards restrictive financial conditions. On that view, higher long-dated yields have not, so far, tightened the outlook enough to alter the expected Fed path, with the policy bias still tilted towards further tightening.
