Market Anticipates Multiple Fed Rate Cuts by 2026

According to Odaily, Noah Wise, a senior portfolio manager at Allspring Global Investments, stated that the market's expectation of the Federal Reserve cutting interest rates three to four times in 2025 and five to six times by July 2026 is reasonable. Wise explained that this expectation strikes a delicate balance between two distinct yet plausible scenarios. In the first scenario, inflation remains high while the economy avoids a recession, leading the Federal Reserve to reduce rates at a slower pace than currently anticipated by the market. In the second scenario, the economy experiences a downturn, and inflation decreases, potentially resulting in five to six rate cuts by the end of 2025 and possibly eight or more by July 2026, depending on the severity of the recession.