IMF Warns of Limited Rate Cut Room in 2026 as Inflation Tracking Toward 2% Target
β’ The International Monetary Fund's Executive Board concluded its 2026 Article IV Consultation on April 2, stating there is "little room to cut interest rates in 2026" despite moderating inflation expectations. β’ The IMF projects U.S. GDP growth will reach 2.4% in 2026, up from 2.0% in 2025, while the federal funds rate is forecast to decline only from 3.6% to 3.4% β representing barely a single rate cut for the entire year. β’ Inflation is on track to hit the 2% target by early 2027, but the IMF warns that growth will peak this year and slowly decay toward 1.8%, while U.S. debt continues climbing annually.
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