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EY: The data dot matrix still shows that there will be two 25 basis point interest rate cuts by the end of the year

According to online reports, EY economist Gregory Daco said that the Federal Reserve is expected to keep the benchmark interest rate unchanged at 4.25%-4.50%. Recent comments from the Federal Reserve have reinforced a wait-and-see attitude, with officials showing no urgency to adjust policy amid increased uncertainty about the economic outlook. The policy statement may not change much. The FOMC is likely to reiterate that inflation remains "a little high", labor market conditions are "solid" and unemployment is "stable at a low level." It may reiterate that "the risks of higher unemployment and rising inflation have increased," especially given the uncertainty of the economic outlook. The dot chart of median interest rate expectations is expected to remain unchanged, with two 25-basis point rate cuts by the end of the year. It is expected that the dot chart will still show that interest rates will be further cut by 50 basis points to 3.4% in 2026 and again to 3.1% in 2027. Policymakers 'median estimate for long-term neutral interest rates is likely to remain unchanged at 3%.

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