A Reuters poll shows a majority of economists expect the Federal Reserve to hold interest rates steady through 2026. This marks the first clear consensus for a hawkish outlook this year. Forecasters previously expected rate cuts but now view monetary easing as unlikely.
Persistent inflation and a blowout May jobs report drove the shift in expectations. The survey of 102 economists took place between June 4 and June 9. Nearly 70% of respondents foresee rates remaining in the current range through the end of the year.
A prolonged high-rate environment impacts bank profitability, loan demand, and credit risk. This shift reshapes the underlying economic assumptions for financial sector ETFs.