ChainCatcher, citing a report from Jinshi, said U.S. asset management company PGIM has outlined its latest view on the Federal Reserve’s interest-rate path. PGIM expects the Fed to raise interest rates three times this year in an effort to curb an overheating economy. It then expects the central bank to reverse that tightening course in 2027.
PGIM said the U.S. economy is “exceptionally strong,” while inflation remains persistently elevated, requiring a new strategy. In monetary policy, rate hikes are generally used to increase the cost of funding and cool excessive demand, while rate cuts lower benchmark interest-rate levels. The report did not provide a more detailed schedule beyond the expected number of moves.
The firm also said it expects the Federal Reserve to deliver three rate cuts in 2027. According to PGIM’s forecast, the final rate would fall to 3.375%, which is below the current level. The projection places three hikes this year and three cuts in 2027 within the same policy cycle, with PGIM expecting the direction of policy to shift in the later year.