Economists No Longer Expect The Fed To Cut Interest Rates This Year, Poll Shows

Economists surveyed in a recent poll no longer expect the Federal Reserve to cut interest rates this year.

The majority of respondents of the Reuters poll gave that answer, with interest rate futures now also pricing a rate hike by the end of the year.

Elsewhere, the survey noted that the new chair of the Federal Reserve, Kevin Warsh, would struggle to build consensus to implement a rate cut should he seek so.

President Donald Trump has said he wants Warsh to “do whatever he wants” but still reiterated his opposition to any potential increase in U.S. interest rates, arguing that borrowing costs should be lowered instead as the economy continues to add jobs and face higher energy prices.

“Kevin is fantastic, and I want him to do whatever he wants,” Trump said during an interview with NBC’s Meet the Press. Trump added that he did not want to exert significant influence over the new Fed chief but argued that strong economic performance should not lead to higher borrowing costs, according to the outlet.

The comments came after the latest U.S. employment report showed the labor market remained resilient. The U.S. economy added 172,000 jobs in May while the unemployment rate held steady at 4.3%, according to data released by the U.S. Bureau of Labor Statistics. Job gains were concentrated in leisure and hospitality, local government and health care. Bureau of Labor Statistics data showed employment in financial activities declined during the month.

Trump argued that financial markets increasingly react negatively to strong economic reports because investors believe the Federal Reserve could respond with tighter monetary policy. He said there was “no reason” to raise rates and maintained that lower borrowing costs would better support economic growth, the NBC News interview said.

However, Goldman Sachs has also pushed its forecast for a rate cut into 2027. The bank now expects the Fed to deliver two rate cuts in June and December 2027, instead of December 2026 and March 2027, Reuters reported.

Tom Porcelli, chief economist at Wells Fargo, told Reuters that “it’s going ​to be very hard for the Fed to justify any action at this point and in the foreseeable future. It will be incredibly difficult to get a ​consensus of Fed officials to go along with the idea of cutting rates.”