FX.co ★ Fed Rate Outlook Eases as U.S. Interest Rate Projection Slips to 3.4% in Q1 2026

The United States’ interest rate projection edged down in the first quarter of 2026, signaling a modest softening in expectations for future borrowing costs. The current projection stands at 3.4%, down from 3.6% recorded in the fourth quarter of 2025.

This 0.2 percentage point decline suggests that market participants and policymakers now anticipate a slightly less restrictive rate environment ahead than they did at the end of last year. The adjustment may reflect evolving views on growth, inflation, or financial conditions, though no additional details were provided.

The updated figures, current as of 18 March 2026, will be closely watched by investors and businesses calibrating their plans for financing, investment, and consumption in the coming quarters.