Fed Rate Cut Odds for 2026 Drop to 21%
Markets now see only a 21% chance of a Fed rate cut in 2026, down from expectations of up to four cuts earlier this year.
According to market pricing, the probability of the Federal Reserve cutting interest rates in 2026 has fallen to just 21%. This marks a dramatic shift from just months ago, when traders expected as many as four rate cuts this year.
The repricing reflects a return of the "higher for longer" narrative, as sticky inflation and resilient economic data keep the Fed on hold. The CME FedWatch tool and other derivatives markets now imply a prolonged period of elevated rates.
Source: The Kobeissi Letter