JPMorgan: No U.S. Interest Rate Cuts Expected in 2026 Despite Market Expectations
JPMorgan expects the U.S. Federal Reserve to keep interest rates unchanged throughout 2026, ruling out any rate cuts amid the continued strength of the U.S. economy.
In a recent report, the bank said that the resilience of the labor market, ongoing job growth, and solid GDP performance are key factors supporting the Fed’s decision to maintain its current monetary policy stance. It added that core inflation remaining above 3% would make it difficult for policymakers to justify any rate cuts in the coming year.
The report noted that these conditions reinforce the Federal Reserve’s cautious approach, as it seeks to strike a careful balance between curbing inflation and sustaining economic momentum.
In contrast, JPMorgan highlighted a gap between its outlook and market expectations, with markets currently pricing in two potential rate cuts in 2026, each amounting to 25 basis points. This divergence reflects differing assessments of the inflation trajectory and the underlying strength of the U.S. economy.
The discrepancy underscores the uncertainty surrounding U.S. monetary policy expectations, as markets continue to watch closely for any signals from the Federal Reserve regarding its future policy direction.
