The New York Fed DSGE Model Forecast—September 2026
This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since June 2026 . The New York Fed DSGE model expects similar growth, and slightly more persistent inflation, compared to its forecasts in June. r* forecasts are slightly lower for 2026…
The Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model outlines its economic forecasts for September 2026, showing relative consistency with the June 2026 projections. Growth and inflation anticipations exhibit minimal shifts, with minor adjustments to the economy's potential output and the central bank's policy stance.
The model projects a modest GDP growth of 1.2 percent for the fourth quarter of 2026, with a modestly expanded range of possible outcomes. Core PCE inflation is forecast at 3.3 percent for 2026, aligning closely with the June forecast and expecting a slow shift towards the Federal Open Market Committee's 2 percent inflation target as the year progresses.
The model also predicts a slight decline in the real natural rate of interest to 1.9 percent for the end of 2026, marking a slight downward revision from the June prediction.
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