Emre Yumlu 
Expectations regarding monetary policy are reshaping in global markets. US-based investment bank JPMorgan has shared a notable assessment by updating its forecasts on the US Federal Reserve’s (FED) interest rate policy. According to the bank’s new projection, the previously anticipated rate cut cycle may have already come to an end.
Recent increases in geopolitical risks and their potential impact on inflation are causing expectations about monetary policy to be reconsidered.
Inflation Concerns Back on the Agenda! Rate Cut Cancelled?
Ongoing conflicts between the US and Iran have reignited discussions about inflation risks in global markets. Possible effects on energy prices and global supply chains are strengthening concerns that price pressures could increase.
These developments may lead the FED to adopt a more cautious stance on interest rate policy. Analysts note that if geopolitical risks create upward pressure on inflation, monetary policy could remain tighter.
JPMorgan: The Rate Cut Cycle May Have Ended
According to a report in South Korea-based Maeil Business Newspaper, JPMorgan has updated its expectations regarding the FED’s interest rate policy. Based on evaluations included in a report published by the New York office of the Bank of Korea, the bank believes that the US rate-cutting cycle may have ended in December.
JPMorgan had previously raised the possibility of limited rate cuts in 2026. However, following recent developments, the bank now states that it does not expect any rate cuts this year.
Interest Rates Expected to Remain Unchanged
According to the new projection shared by the bank, the FED’s policy rate is expected to remain steady in the 3.5% to 3.75% range throughout 2026. JPMorgan believes there is a possibility that inflation will remain above the FED’s target level in the foreseeable future.
For this reason, a rapid easing of monetary policy is not anticipated. On the contrary, if inflation remains persistently high, a different policy path could come into focus.
Rate Hike Scenario for 2027
Another striking point in JPMorgan’s assessment is the potential for a future rate increase. The bank forecasts that the FED’s next move could be a rate hike in 2027, potentially pushing the policy rate back up to the 4% level.
This scenario indicates that a prolonged tight policy stance could continue.
Differing Expectations in the Market
Meanwhile, there are also varying views in financial markets regarding the FED’s interest rate path. While institutions such as Citi and TD Cowen expect three rate cuts this year, Barclays, Bank of America, Goldman Sachs, Morgan Stanley, Nomura, and Wells Fargo forecast two rate cuts. Deutsche Bank believes there could be only a single rate cut during the year.
These differing forecasts show that uncertainties in the global economy and the inflation outlook remain contentious in terms of their impact on monetary policy. Data and economic indicators to be released by the FED in the coming period will play a critical role in determining the direction of interest rate policy.
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