Wells Fargo: Fed to Hold Rates Through 2027, 10Y Near 4.35%

Wells Fargo Economics, headed by Tom Porcelli and his team, forecasts the Federal Reserve will maintain the federal funds rate at the current 3.50%-3.75% range through the end of 2027. This outlook reflects persistent inflation risks that prevent the Fed from cutting rates.

The bank also projects the 10-year Treasury yield will average approximately 4.35% in 2026 and ease slightly to 4.30% in 2027. The view suggests a prolonged period of tight monetary policy, weighing on rate-sensitive assets.