Speech

U.S. Economy: The Road Ahead


Abstract: As we move into 2026, it feels like the fog is starting to lift — or perhaps our eyes are just starting to adjust. The road ahead is coming back into focus, and once again we are seeing an economy that remains remarkably resilient. As the inflation rate has fallen, we have been bringing rates back down toward neutral levels, reducing the fed funds rate 175 basis points over the last year and a half. I think of these cuts as having taken out some insurance to support the labor market as we work to complete the last mile to bring inflation back to target. So far, so good. But we know things change, and as they do, we remain ready to respond as appropriate.

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Provider: Federal Reserve Bank of Richmond

Part of Series: Speech

Publication Date: 2026-02-03