Major banks dial back expectations for Fed rate cuts…growing view of a hold through 2026

Following the December employment data, major global banks are successively lowering their outlook for interest-rate cuts by the Federal Reserve (Fed).

According to Walter Bloomberg, an account that posts breaking economic news, JPMorgan expects the Fed not to cut rates even once in 2026, forecasting that the benchmark rate will be maintained at around 3.5–3.75%. It also mentioned the possibility of rate hikes in 2027 depending on economic conditions.

Barclays also revised its previous forecast, pushing back the timing of rate cuts to June and December 2026.

Market expectations are shifting rapidly as well. In the interest-rate futures market, the probability that the benchmark rate will be held steady at the January Federal Open Market Committee (FOMC) meeting is priced at about 95%. This suggests that the view is spreading that the Fed will maintain a cautious stance on easing tightening for the time being.