Key insights
- The latest Fed projections from March 2026 reveal a more pessimistic outlook compared to December. More participants foresee downside risks to GDP growth and upside risks to both unemployment and inflation. This suggests a potential for stagflation, which could pressure the Fed to maintain higher interest rates for longer, negatively impacting US equities.
While it was not a surprise that they are holding rates steady, the projected risks have become more pessimistic. https://www.federalreserve.gov/monetarypolicy/fomcprojtabl2026
Compared to December last year, more participants are leaning toward downside risks to GDP growth, upside risks to unemployment rate and inflation, although estimates have ticked higher for GDP, they have also become higher for unemployment and inflation.
Risks to GDP growth
Number of participants
|Date of projections|Weighted downside|Balanced|Upside| |:-|:-|:-|:-| |March 2026|14|5|0| |December 2025|8|8|3|
Risks to the unemployment rate
Number of participants
|Date of projections|Weighted downside|Balanced|Upside| |:-|:-|:-|:-| |March 2026|0|3|16| |December 2025|0|6|13|
Risks to PCE inflation
Number of participants
|Date of projections|Weighted downside|Balanced|Upside| |:-|:-|:-|:-| |March 2026|0|2|17| |December 2025|2|5|12|