OECD Projects Fed to Cut Key Rate to 3.25%-3.5% by End of 2026

The Organisation for Economic Co-operation and Development projects the Federal Reserve will gradually reduce its key interest rate to 3.25%-3.5% by the end of 2026, according to a Dec. 2 report. The OECD raised its U.S. growth forecast to 2% for 2025 (from 1.8%) and to 1.7% for 2026 (from 1.5%). The organization warned that potential U.S. tariff increases could slow global growth in 2026 and described the nation's fiscal policy trajectory as unsustainable, while noting upside potential if AI investment expands further.