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Federal Reserve

AI Expectations Underpin the Economic Outlook for 2026

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At their December meeting, Federal Reserve officials estimated that the U.S. economy grew 1.7% in 2025, a year plagued by uncertainty around costly new tariffs. The forecast for 2026 growth was raised to 2.3% — a significant jump from the 1.8% rate previously forecasted in September.

The Fed Lowers Rates in an Economic Balancing Act

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Federal Reserve announces rate cut to balance inflation and employment in 2025

On September 17, 2025, the Federal Reserve’s Federal Open Market Committee (FOMC) lowered the target range for the benchmark federal funds rate by one-quarter percentage point — the first rate cut in nine months. This brought the range to 4.0%–4.25% and resumed the process of lowering it from a high of 5.25%–5.5%, where it stood from July 2023 to September 2024.