📝Expect More Fed Cuts In 2026: Rabobank

As we expected, it took a lot of effort to get the hawks on board with a rate cut in December, so they are likely to skip January. Therefore, in our view, a March cut is more likely if the labor market remains weak and inflation contained. However, the FOMC and Powell are clearly in no hurry to cut further. The projections still imply only one rate cut in 2026. Nevertheless, we expect the Fed to continue its cutting cycle in 2026 at least until their estimate of the neutral rate is reached. As we explained in our Outlook 2026, once the new Trump-appointed Chair is in place at the June 17-18 meeting we are likely to see a determined effort to get policy rates back to neutral or even below that before the end of 2026. - Rabobank