OECD Forecasts Gradual Fed Rate Cuts by 2026

The OECD predicts the Federal Reserve will gradually lower interest rates to between 3.25% and 3.5% by the end of 2026. This shift in the organization’s projection comes with a revised forecast for U.S. economic growth, now projected at 2% in 2025 and 1.7% in 2026. The OECD warns about potential economic slowdown due to increased U.S. tariffs on global trade. They also highlight the unsustainable nature of current U.S. fiscal policies. If trade barriers continue to rise, this could exacerbate global economic decline. However, the development of AI technology and investments in its field might present a positive factor for future global growth.