The Congressional Budget Office is out with their projections for real GDP, inflation, unemployment, and interest rates. The current projections are compared to January 2025 projections. <\/p>\n
Real GDP Growth (annual, %)<\/p>\n
2025: 1.4% (\u20130.5 pp vs Jan\u2019s 1.9%) \u2192 tariffs + lower immigration outweigh fiscal stimulus.<\/p>\n
2026: 2.2% (+0.4 pp vs Jan\u2019s 1.8%) \u2192 boost from reconciliation act (tax cuts, expensing, federal spending).<\/p>\n
2027: 1.8% (\u2248 same as Jan) \u2192 demand fades, weaker labor supply partly offset by higher domestic output.<\/p>\n
2028: 1.8% (\u2248 same as Jan) \u2192 steady, as policy impacts balance out.<\/p>\n
By end-2028: Level of GDP \u2248 0.1% higher than January\u2019s forecast.<\/p>\n
Inflation (PCE, % y\/y)<\/p>\n
2025: 3.1% (higher than Jan) \u2192 tariff-driven spike.<\/p>\n
2026: 2.4% \u2192 easing as tariff effects fade but demand still strong.<\/p>\n
2027: 2.0% \u2192 Fed target reached.<\/p>\n
2028: 2.0% \u2192 stable at target.<\/p>\n
Unemployment Rate (%)<\/p>\n
2025: 4.5% \u2192 higher vs Jan at 4.3% due to weaker demand.<\/p>\n
2026: 4.2% \u2192 down from 4.4% in January. Fiscal boost lowers joblessness.<\/p>\n
2027: 4.4% \u2192 unchanged from January. Softening growth nudges unemployment up.<\/p>\n
2028: ~4.4% \u2192 unchanged from January little change.<\/p>\n
Interest Rates (Fed Funds, % end-Q4)<\/p>\n
2025: 4.5% (Aug) \u2192 up from 4.3% in January. 3.6% up from 3.4% (Jan 2026) \u2192 Fed cuts by 75 bps as growth slows.<\/p>\n
2026: 3.5%\u20133.6% range \u2192 easing continues.<\/p>\n
2027: 3.3% \u2192 stabilizing lower.<\/p>\n
2028: 3.3% \u2192 unchanged.<\/p>\n
10-year Treasury: 4.3% (Q4 2025) \u2192 3.9% (Q4 2028).<\/p>\n
Summary: The CBO now sees slower growth in 2025 (1.4%), followed by a temporary rebound in 2026 (2.2%) from fiscal stimulus. Inflation peaks at 3.1% in 2025 before falling back to 2% by 2027\u201328. Unemployment edges up to 4.5% in 2025, dips in 2026, then levels off near 4.4%. Interest rates are projected to fall steadily as the Fed eases, with the Fed funds rate dropping from 4.3% in late 2025 to 3.3% by 2027\u201328.<\/p>\n","protected":false},"excerpt":{"rendered":"The Congressional Budget Office is out with their projections for real GDP, inflation, unemployment, and interest rates. The…\n","protected":false},"author":2,"featured_media":21327,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-21326","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/21326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=21326"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/21326\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/21327"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=21326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=21326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=21326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}