T. Rowe Price Economist Shifts Fed Rate Outlook: 45% Chance of No Change in Next 12 Months

According to Jin10 data, on May 29, Blerina Uruci, chief U.S. economist at T. Rowe Price, shifted her outlook, stating that markets may still be underestimating the Federal Reserve's potential for further monetary tightening. Uruci cited sustained Iran tensions since early May, elevated oil prices, and resilient U.S. economic growth as factors that could pressure inflation expectations, wage dynamics, and corporate pricing behavior despite the Fed's ability to overlook temporary energy shocks.

For the next 12 months, Uruci now assigns a 45% probability that the federal funds rate will remain unchanged, a 35% probability of a rate hike by year-end or early 2027, and a 20% probability of a rate cut.