Imminent Recession? It's Up To The Fed

The Fed signaled few or no rate cuts in 2026 and revised its PCE outlook to 2.7%, citing elevated core inflation and justifying continued policy caution. That hawkish stance raises recession risk and implies a more prolonged period of restrictive rates, weighing on risk assets and creating pressure for bond-sensitive sectors.

Analysis

The Fed signaled few or no rate cuts in 2026 and revised its PCE outlook to 2.7%, citing elevated core inflation and justifying continued policy caution. That hawkish stance raises recession risk and implies a more prolonged period of restrictive rates, weighing on risk assets and creating pressure for bond-sensitive sectors.