Fed Expected to Cut Rates by an Additional 3 BPs by End-2026

Summary

The Federal Reserve’s interest rate swaps indicate an additional rate cut of 3 basis points by the end of 2026.Wallstreetcn

Impact Analysis

So they’re basically signaling a very cautious approach here. The Fed’s expected additional 3 basis point cut by the end of 2026 seems more symbolic than impactful, especially given the broader context of political pressures and economic conditions. With the upcoming midterm elections, there’s a clear political undertone—Trump’s administration might be pushing for economic stimulus to secure congressional seats, as noted by Rabobank.Wallstreetcn The timing is also interesting, as it aligns with the transition to a new Fed chair, potentially indicating a shift in policy direction or a nod to political loyalty.Wallstreetcn For the markets, this could mean a continued dovish stance, but the actual impact on economic growth or inflation might be limited. Watch for potential currency impacts—this could weaken the dollar slightly, making euro and Aussie dollar more attractive.时代财经 Bottom line—this is more about managing expectations and political optics than a major economic shift.