Five major institutions forecast the Federal Reserve's interest rate cuts in 2026

On January 28, five major institutions including JPMorgan and Citigroup forecast the Federal Reserve's interest rate cuts in 2026 and the focus of tonight's rate decision as follows:

Barclays Bank

Rate cut forecast: Total of 50 basis points

Viewpoint: It is expected that the FOMC will signal that it is not in a hurry to cut rates further. The committee may point out that the current downward risk in employment and the upward risk in inflation have become balanced.

Powell's statement: He is expected to reinforce the FOMC's stance of not being in a hurry to cut rates. #美联储何时降息？

Bank of America

Rate cut forecast: Total of 50 basis points

Viewpoint: Political factors may become a focus in the January meeting. The Federal Reserve will firmly maintain the status quo, and the risk balance is expected to remain unchanged.

Powell's statement: The press conference may revolve around political rather than policy issues. However, regarding policy, the current market pricing may bring a risk of dovish surprises.

Citigroup

Rate cut forecast: Total of 50 basis points

Viewpoint: If the next rate cut aims at policy normalization rather than addressing urgent risks, decision-makers may seek a broader consensus than in December last year, which requires clearer progress on inflation as a prerequisite.

Powell's statement: He is likely to emphasize that the three recent rate cuts help stabilize the job market and that the current policy stance is appropriate for assessing its impact. #美联储降息

JPMorgan

Rate cut forecast: No rate cuts in 2026

Main viewpoint: After previously completing three risk management rate cuts, many FOMC members have indicated that now is an appropriate time to pause actions.

Powell's statement: He is expected to indicate that the current policy is sufficient to address the risks posed by the dual mandate and will avoid discussing various political issues related to the Federal Reserve.

Wells Fargo

Rate cut forecast: Total of 50 basis points

Viewpoint: A strong argument is that the longer the FOMC waits to cut rates, the higher the threshold to justify further easing from an economic perspective.

Powell's statement: He is expected not to hint at further easing at the next meeting in March. He is likely to be asked about issues related to the Department of Justice investigation, but his response is expected to be consistent with previous statements.

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