TD Securities: Fed Hawkish Hold Through 2027

TD Securities analysts Oscar Munoz and Eli Nir have revised their outlook for the Federal Reserve, now expecting a more hawkish policy stance. According to their report, the Fed is likely to hold interest rates steady through 2026, with the hold possibly extending into 2027.

The shift reflects the central bank's ongoing focus on inflation control and a resilient labor market. The analysts believe the Fed will prioritize tightening bias over rate cuts in the foreseeable future.

This outlook implies prolonged elevated borrowing costs, which may influence currency markets and fixed-income strategies. The report did not specify a timeline for any potential easing cycle.