Following Today’s Interest Rate Decision, Wall Street Giants Announce Their Interest Rate Cut Forecasts for This Year – Or Will There Be No Cuts...

Following today’s decision to leave interest rates unchanged, expectations regarding the interest rate path until 2026 are beginning to become clearer. Five major financial institutions, including JPMorgan Chase and Citigroup, shared their thoughts on both potential rate cuts in 2026 and key messages regarding tonight’s rate decision.

While institutional forecasts suggest the Fed will maintain its cautious stance, there are significant differences of opinion regarding the timing of interest rate cuts.

Barclays expects the Fed to implement a total of 50 basis points of interest rate cuts in 2026. According to the bank, these cuts are projected to occur in June and December. Barclays anticipates that the Federal Open Market Committee (FOMC) will signal that it will not rush into rate cuts. It is suggested that the committee may emphasize that the downside risks to employment and the upside risks to inflation are now balanced. Fed Chairman Jerome Powell is also expected to reaffirm a patient approach to rate cuts.

Bank of America forecasts a total of 50 basis points of rate cuts in 2026, to be implemented in June and July. However, it is also noted that market pricing could leave room for a relatively dovish surprise from the Fed.

Citigroup maintains its forecast of a total of 50 basis points of interest rate cuts by 2026, expecting these steps to be taken in June and September. According to Citi, if the next rate cut aims at policy normalization rather than responding to immediate risks, policymakers are likely to seek broader consensus than at the December meeting. This requires seeing clearer progress on the inflation front. Powell is expected to emphasize that the three completed rate cuts have stabilized the labor market and that the current monetary policy stance is appropriate for assessing its effects.

JPMorgan Chase, however, paints a more cautious picture, stating that it does not expect any interest rate cuts in 2026. According to the bank, after three rate cuts for risk management purposes, many FOMC members now believe that a pause is the right time. Powell is also expected to state that current policies are sufficient to manage the risks within the scope of the Fed’s dual mandate and to avoid political controversies concerning the central bank.

Wells Fargo forecasts a total of 50 basis points of rate cuts in 2026, to be implemented in March and June. According to the bank, the longer the FOMC waits to cut rates, the higher the economic threshold becomes to justify further monetary easing. While Powell is not expected to signal further easing at the March meeting, he may face questions regarding the Justice Department investigation, but his responses are expected to be consistent with his previous statements.

*This is not investment advice.