Economists at DBS Group Research predict the US Federal Reserve will implement two more interest rate increases within the present tightening cycle, with one projected for this year and another expected in early 2027.

In a recent report, Chief Economist Taimur Baig noted that the Fed's unanimous decision to raise rates in September has set the stage for further monetary policy adjustments. He emphasized that although inflation is largely being driven by supply-side factors, the outlook remains fraught with risks that necessitate additional action.

Baig also highlighted that Fed Chair Warsh has expressed dissatisfaction with the current pace at which inflation is returning to the 2% target, reiterating that short-term interest rates continue to serve as a core instrument for fulfilling the central bank's policy mandate. Consequently, Baig forecasts the terminal rate for this hiking cycle will reach 4.5%.