Deutsche Bank Analysis Shows Fed Officials Clustered Around One More 2026 Rate Hike
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Federal Reserve officials were broadly positioned for further interest-rate increases in 2026, with most policymakers clustered around one additional hike while a smaller group favored more aggressive tightening, according to Deutsche Bank's reading of the September dot plot. Deutsche Bank's identification of individual dots showed four regional Fed presidents, including three current voters, leaning toward 75 basis points of total hikes this year: Cleveland Fed President Beth Hammack, Dallas Fed President Lorie Logan, Minneapolis Fed President Neel Kashkari, and Kansas City Fed President Jeffrey Schmid. At the more dovish end, Fed Governors Michelle Bowman and Christopher Waller projected only one hike total for the year, while the remaining 12 officials were estimated around the 4.125% median, anticipating one additional rate hike over the remainder of the year. For 2027, the distribution was more divided, with eight officials favoring 75 basis points of total tightening and six appearing to favor 50 basis points, while Waller, New York Fed President John Williams and San Francisco Fed President Mary Daly were identified as likely favoring some easing next year. The median long-run federal funds rate estimate also rose to 3.2% from 3.1%, while the mean increased to 3.3%, with both reaching post-pandemic highs, according to Deutsche Bank.