The Federal Reserve's interest rate cut has been pushed back to late 2026 due to war-related inflation risks, according to a Reuters poll. Most economists predict that rates will fall at least once more, despite rising prices for gasoline and energy prices. However, they hold milder inflation expectations than households that have seen sharp increases in gasoline, energy prices since the start of the war. The poll also revealed that 56 of 103 economists predicted that the Fed's benchmark interest rate would remain steady in the ​3.50-3.75% range by the end of September, compared to nearly 70% who expected at least one reduction in late March. Nearly a third of economists now expect rates to remain unchanged this year, nearly double the share in the previous survey. The Fed's preferred inflation gauge, the Personal Consumption Expenditures Price Index, is expected to rise by an annual rate of 3.7%, ⁠3.4% and 3.2% in the second, third and fourth quarters, about 30 basis points higher than the forecasts in mid-March. The main risk to our call is that inflation does not behave as favorably “as we think they will and the Fed just stays on hold."