The Fed’s dot plot came in tougher than expected. 🚨
The median rate for end-2026 rose from 3.8% to 4.1%.
This implies a range of 4.00% to 4.25% in December.
For 2027, the median is also 4.1%. No cuts in the entire year.
In June, this projection was 3.6%.
And the rest of the projections shows the logic behind that.
Growth revised up: 2.3% in 2026 and 2.4% in 2027.
Unemployment revised down: from 4.3% to 4.1%.
Inflation revised up: PCE from 3.6% to 3.7% and core from 3.3% to 3.4%.
Nearly the entire committee sees the inflation risk tilted to the upside.
The takeaway is straightforward: the Fed believes activity can withstand the tightening.
The question that remains is whether the economy will truly hold up and they will need to revise and/or take opposite measures in urgent fashion.
In either case, my view remains the same. The source of liquidity in these coming months will not be the Fed.
So the market will price that in. Bitcoin is already pricing it. #FedRateWatch
The median rate for end-2026 rose from 3.8% to 4.1%.
This implies a range of 4.00% to 4.25% in December.
For 2027, the median is also 4.1%. No cuts in the entire year.
In June, this projection was 3.6%.
And the rest of the projections shows the logic behind that.
Growth revised up: 2.3% in 2026 and 2.4% in 2027.
Unemployment revised down: from 4.3% to 4.1%.
Inflation revised up: PCE from 3.6% to 3.7% and core from 3.3% to 3.4%.
Nearly the entire committee sees the inflation risk tilted to the upside.
The takeaway is straightforward: the Fed believes activity can withstand the tightening.
The question that remains is whether the economy will truly hold up and they will need to revise and/or take opposite measures in urgent fashion.
In either case, my view remains the same. The source of liquidity in these coming months will not be the Fed.
So the market will price that in. Bitcoin is already pricing it. #FedRateWatch
