Economists Believe Fed Will Not Raise Interest Rates until 2027

Economists are split, but a growing group of major forecasters now think the Federal Reserve’s next move might indeed be a rate hike in 2027, after holding policy steady through 2026, rather than raising rates any earlier.​

What economists are saying

• J.P. Morgan’s chief U.S. economist Michael Feroli expects the Fed to keep the federal funds rate unchanged through all of 2026, with the next move being a 25‑basis‑point increase in the third quarter of 2027.​

• This view implies no rate hikes (and no further cuts) before 2027, which matches the headline you quoted: the first increase would only come in 2027.​

How this differs from other forecasts

• The Fed’s own “dot plot” still shows at least one more cut in 2026 on the median projection, so official forecasts do not universally endorse a complete pause until 2027.​

• Other banks, such as Goldman Sachs and Barclays, still anticipate rate cuts in 2026 (for example, cuts beginning around mid‑2026), so they do not share the “no move until 2027” view.​

Why some expect no move until 2027

• Forecasters arguing for a hold through 2026 point to robust growth, resilient labor markets, and inflation that is easing only gradually, suggesting current rates are not very restrictive.​

• In that scenario, the Fed can sit tight in 2026 and only later nudge rates higher in 2027 if inflation risks re‑emerge or growth remains above potential.​

What this means in practice

• If J.P. Morgan’s type of forecast proves right, borrowing costs for mortgages, business loans, and credit cards would likely stay in roughly the current range through 2026, with only modest upward pressure starting in 2027.​

• However, all of these projections are conditional on incoming data; a sharp slowdown in growth or a faster‑than‑expected drop in inflation could still push the Fed to cut before 2027, while a renewed inflation spike could force earlier hikes.​