Fed Projections & Market Outlook

Unemployment Forecasts:
4.5% by year-end, easing to 4.2% long-term.

Recent Data:
Strong Q2 GDP revision challenges dovish market expectations.

Rate Cuts Expected:
Markets pricing 39bps cuts by year-end (~1 cut certain, 50/50 chance for a 2nd).

Fed Outlook:
Rates projected to fall to 3.50–3.75%, suggesting 2 cuts.

Key Focus:
Labor data could validate fewer cuts or reopen broader easing expectations.