(April 2): While US inflation is on course to return to the US Federal Reserve’s (Fed) 2% target in the first half of 2027, policymakers have little room to cut interest rates this year, according to the International Monetary Fund (IMF). IMF staff expect a single rate reduction by the end of 2026, according to the Washington-based lender’s annual review of US economy, known as an Article IV consultation. Under IMF staff’s baseline outlook, the Fed’s benchmark rate will reach a 3.25% to 3.5% target by year end. The fund continues to predict 2.4% gross domestic product growth for the country in 2026, supported by fiscal policy and a lower policy rate. The fund assumed an average applied effective tariff rate of around 7% to 8.5%.

Source: The Edge Markets April 02, 2026 13:59 UTC