Fed projects US unemployment at 4.1% for 2026, down from 4.3% prior forecast

The Fed marking unemployment lower across every horizon in the projection window, while leaving the longer-run rate untouched, implies officials read the labor market as running tighter than they assumed rather than structurally changed. That distinction matters for how the rate path and risk sentiment get priced, since a resilient jobs backdrop removes some of the urgency for near-term easing. Whether the shorter-run forecasts converge toward the longer-run rate in subsequent revisions is the open question.