Emre Yumlu 
After the US Federal Reserve (Fed) left interest rates unchanged in line with expectations, market attention has shifted decisively toward the policy outlook for 2026. Leading Wall Street institutions have begun to outline their scenarios on whether the Fed will cut rates this year — and if so, when. While there is broad agreement that the central bank will maintain a cautious stance, forecasts diverge sharply when it comes to timing and scope.
The Fed’s Core Message: Patience and Data First
The prevailing interpretation of the latest decision is that the Fed wants to observe the full impact of the three rate cuts implemented previously. Inflation has moderated but remains above target, while the labor market shows resilience without clear signs of deterioration. This backdrop supports a “wait-and-see” approach from Fed Chair Jerome Powell, signaling restraint rather than urgency.
Barclays and Bank of America: Cuts Expected, but Not Soon
Barclays anticipates a total of 50 basis points in rate cuts during 2026. According to the bank, these moves could materialize in June and December. Its outlook suggests that downside risks to employment and upside risks to inflation are now more balanced, reducing the need for rapid easing.
Bank of America shares the 50-basis-point view but differs on timing. It expects cuts to arrive earlier, potentially in June and July. The bank also notes that current market pricing could leave room for a relatively dovish surprise from the Fed if incoming data softens.
Citigroup: A Normalization-Driven Path
Citigroup continues to project 50 basis points of easing, likely split between June and September. However, Citi frames these cuts as part of a gradual normalization process rather than a reaction to immediate economic stress. For this scenario to play out, clearer and more sustained progress on inflation would be required, alongside broader consensus within the Federal Open Market Committee.
JPMorgan: No Cuts on the Horizon
JPMorgan Chase stands out with the most conservative view. The bank does not expect any rate cuts in 2026. Its analysts argue that after three precautionary cuts, many policymakers may see a prolonged pause as the most prudent option. Powell is also expected to emphasize that the current policy stance is sufficient to manage risks tied to the Fed’s dual mandate.
Wells Fargo: Earlier, But Limited Easing
Wells Fargo takes a middle-ground approach, forecasting 50 basis points of cuts in March and June. The bank cautions that the longer the Fed waits, the higher the economic threshold becomes for justifying additional easing. While an early signal of accommodation is possible, Wells Fargo does not expect aggressive guidance.
A Divided Outlook, One Common Theme
Despite varying forecasts, a common thread runs through all projections: the Fed is unlikely to rush. Markets may be forced to remain patient, parsing each data release and policy signal carefully. Whether 2026 brings multiple rate cuts, a modest adjustment, or none at all, communication and tone will be just as influential as the decisions themselves.
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