How many Fed rate cuts in 2026?

As of July 2026, the Federal Reserve has maintained the federal funds rate at 3.50%–3.75% with no cuts since late 2025, and recent FOMC meetings in March and July resulted in unanimous decisions to hold rates steady. The market-implied probability for zero cuts is extremely concentrated at 81.3%, reflecting a decisive shift from earlier easing expectations to a hawkish stance driven by 'sticky inflation' and 'resilient growth'. This shift was cemented by the removal of the cutting bias under new Chair Kevin Warsh, whose inaugural meeting in June 2026 hinted at potential future rate increases rather than cuts.

The Fed's median dot plot from mid-2026 indicates a projection of only one 25bps cut for the year, but the underlying distribution has shifted significantly hawkish, with 18 of 19 participants penciling in a rate of 3.8% by year-end 2026, implying a possible hike rather than a cut. Recent data shows a 93% probability of holding steady at the July meeting, and bond futures markets have pared down expectations from two cuts in January to nearly zero by mid-2026. While some analysts like Morningstar and Morgan Stanley still anticipate one or two cuts later in the year, the consensus among major institutions like Goldman Sachs and J.P. Morgan is that the Fed will remain on hold or potentially hike rates in 2026.

External factors such as war-related inflation risks and oil shocks have further complicated the outlook, pushing potential cuts back to late 2026 or 2027. The Fed has abandoned its easing bias, and the current economic environment of late-stage inflation fears suggests an extended pause in rate cuts. Although the median dot plot still shows one cut, the practical likelihood of any cut occurring is low given the unanimous steady decisions and the hawkish tone raising the likelihood of a rate hike by year-end.