How many Fed rate cuts in 2026?

The market is pricing a very high probability that the Fed ends 2026 without any 25 bp cuts, and that is consistent with a regime where inflation has not cooled enough, labor markets remain decent, and policymakers still prefer to keep policy restrictive. With only a few meetings left after mid-September, the bar for a cut is high if the Committee believes it can hold rates steady without damaging growth. In that sense, the current price implies that investors see the Fed as having little urgency to ease, and I agree that this is the most likely broad outcome.

The main reason to be slightly less extreme than the market is that late-year policy decisions can change quickly if growth slows, unemployment trends higher, or financial conditions tighten unexpectedly. Even if the Fed begins 2026 committed to a hold, three or four remaining meetings are enough time for a single 25 bp cut to become plausible if data deteriorate. That tail risk matters because this market is binary: one cut at any point in 2026 is enough to make Yes fail, so a modest late-cycle easing cycle would immediately flip the result.

Historical Fed behavior also argues for caution about absolute certainty. The Fed often waits longer than markets expect before cutting, but when it does move, it can do so relatively quickly once the data soften enough to justify action. That means a year can look like a guaranteed no-cut year right up until one or two weak reports force a recalibration. Still, the combination of the current market price, the lack of any obvious emergency-cut setup, and the fact that the year is already well advanced all support a strong probability that no cuts happen at all.