Security National Bank's private client services team projects inflation may progress toward the Federal Reserve Board's (FRB) 2.0% goal but not sustainably remain below 2.0%. The consumer price index (CPI) will likely hover around 3.0%, and personal consumer expenditures price index (PCE) inflation will average 2.5%. We expect the FFR to stay at 5.5% through the third quarter before a series of rate cuts return it to the neutral level of 3.5% in 2026. We expect the 10-year treasury to end the year at 4.5%. Fiscal pressures will eventually lead to higher long-term rates. We expect earnings for the S&P 500 to post modest growth for several years.
