Major Financial Institutions Maintain 2026 Two-Cut Forecast as Fed Signals Measured Approach
Wall Street predicts two 2026 rate cuts despite Fed's conservative single-cut guidance.
Insights:
Following the December Federal Open Market Committee (FOMC) meeting, a clear divergence has emerged between the Federal Reserve's cautious guidance and Wall Street's more aggressive rate-cut expectations. While Fed officials indicated they expect only one 25 basis point (BP) rate cut in 2026—unchanged from their September median projection—major financial institutions are maintaining forecasts for two cuts totaling 50 BP, despite signals that near-term reductions are unlikely.
