The Fed is forecasting economic growth and falling unemployment, yet it is cutting interest rates—something usually seen in recessions. U.S. stocks hit a record high yesterday, and some Wall Street analysts are concerned that this all looks a bit frothy.

The U.S. Federal Reserve’s “ Summary of Economic Projections ,” published this week, shows that the central bank believes the economy will grow through 2028. In June, their change in GDP estimate for 2025 was 1.4%. Now, it’s 1.6%. It’s even rosier for 2026: 1.8%, rising to 1.9% in 2027.

At the same time, the Fed sees the unemployment rate falling from 4.5% now to 4.2% in 2028.

So why did the Fed cut interest rates on Wednesday?

Normally, if a central bank believes the economy is growing and unemployment is falling then it would keep

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