Market Predicts Multiple Fed Rate Cuts by 2026

Market analysts are predicting a series of Federal Reserve rate cuts in both 2025 and 2026. Noah Wise, a senior portfolio manager at Allspring Global Investments, believes the market’s expectation for three to four cuts in 2025 and five to six cuts by July 2026 is reasonable. Wise highlights that these projections stem from two key scenarios: either inflation remains elevated while avoiding a recession, prompting slower rate reductions than currently anticipated; or the economy experiences a downturn, leading to a decrease in inflation that could result in more aggressive rate cuts throughout 2025 and potentially beyond.