FinanceTracking
How many 25bp Fed rate cuts in 2026, incl. emergency and December?
How many 25-basis-point rate cuts will the Fed make in 2026, including emergency cuts and the December meeting?
Current read
Expectation of zero rate cuts remains extremely solid, with the hiking cycle narrative continuing and no signals of rate cuts emerging.
Where the answer stands
Zero rate cuts
Two rate cuts
Three rate cuts
Five rate cuts
News evidence this period continues to reinforce the judgment that the Fed will not cut rates in 2026. Multiple reports confirm the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with a hawkish dot plot signaling at least one more hike this year. The two-year Treasury yield has surged to around 4.75%, well above the current policy rate, indicating the market is pricing in continued tightening rather than cuts. Although some traders are betting the pace of hikes may fall short of expectations, this does not alter the overall tightening direction. The baseline likelihood of zero rate cuts remains at an extremely high 95.75%, unchanged from the prior period.
Key developments
- The Fed raised rates by 25bp to 3.75%-4.00% on September 17, its first hike since 2023, with the dot plot signaling at least one more increase this year.
- The two-year Treasury yield surged to a multi-year high around 4.75%, well above the current fed funds rate, as markets price in roughly 80bp of additional tightening over the next year.
- Some investors are betting the Fed's actual pace of hikes may fall short of current current likelihood, though the trade faces risks from Middle East conflicts.
How we read it
The Fed's September FOMC meeting delivered a 25bp hike with a hawkish dot plot showing 16 of 18 officials expect at least one more increase this year, directly reinforcing the expectation of no rate cuts in 2026.
The two-year Treasury yield rose to around 4.75%, well above the 3.75%-4.00% policy rate, with markets pricing roughly 80bp of additional tightening, indicating the bond market is pricing continued hikes rather than cuts.
While some investors are betting the pace of hikes may undershoot expectations, this represents marginal positioning around the degree of tightening rather than any signal of rate cuts or a policy pivot, leaving the baseline likelihood of zero cuts unchanged at 95.75%.
Earlier updates
- — Expectation of zero rate cuts is firmly entrenched, with current likelihood having fully pivoted from cuts to hikes.; The news evidence in this period further solidifies the judgment that the Fed will not cut rates in 2026. Multiple reports confirm that the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with a hawkish dot plot signaling at least one more hike this year. The market reacted sharply, with the two-year Treasury yield surging to around 4.75%, well above the current policy rate, indicating that investors are pricing in continued tightening rather than cuts. Although some traders are betting that the pace of hikes may be less aggressive than expected, this does not alter the overall tightening trajectory. The baseline likelihood of zero cuts remains at an extremely high level above 95%.
- — Expectation of zero rate cuts is extremely solid, with the Fed having commenced a hiking cycle and the rate-cut narrative fully extinguished.; News evidence this period continues to reinforce the judgment that the Fed will not cut rates in 2026. Multiple reports confirm the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with a hawkish dot plot signaling at least one more hike this year. The two-year Treasury yield has surged to around 4.75%, well above the current policy rate, indicating markets are pricing in sustained tightening rather than cuts. Although some traders are betting the pace of hikes may undershoot expectations, this does not alter the overall tightening direction. The baseline likelihood of zero rate cuts remains at an extremely high 95.75%, unchanged from the prior period.
- — Expectation of zero rate cuts remains extremely solid, with the hiking cycle narrative continuing and no signals of rate cuts emerging.; This period's news evidence continues to reinforce the judgment that the Fed will not cut rates in 2026. Multiple reports confirm the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with the dot plot signaling at least one more hike this year. The two-year Treasury yield has surged to around 4.75%, well above the current policy rate, indicating the market is pricing in sustained tightening rather than rate cuts. Although some traders are betting the pace of hikes may fall short of expectations, this does not alter the overall tightening direction. The baseline likelihood of zero rate cuts remains at an extremely high 95.75%, unchanged from the previous period.
- — Expectation of zero rate cuts remains extremely solid, with no signals of rate cuts emerging and the hiking cycle narrative continuing.; This period's news evidence continues to reinforce the judgment that the Fed will not cut rates in 2026. Multiple reports confirm the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with a hawkish dot plot signaling at least one more hike this year. The two-year Treasury yield has surged to around 4.75%, well above the current policy rate, indicating the market is pricing in sustained tightening rather than rate cuts. Although some traders are betting the pace of hikes may be less aggressive than expected, this does not alter the overall tightening direction. The baseline likelihood of zero rate cuts remains at an extremely high 95.75%, unchanged from the previous period.
- — Expectation of zero rate cuts remains extremely solid, with the hiking cycle narrative continuing and no signals of rate cuts emerging.; News evidence this period continues to reinforce the judgment that the Fed will not cut rates in 2026. Multiple reports confirm the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with the dot plot signaling at least one more hike this year. The two-year Treasury yield surged to around 4.75%, well above the current policy rate, indicating markets are pricing in continued tightening rather than rate cuts. While some traders are betting the pace of hikes may fall short of expectations, this does not alter the overall tightening direction. The baseline likelihood of zero rate cuts remains at an extremely high 95.75%, unchanged from the prior period.
- — Expectation of zero rate cuts remains extremely solid, with the hiking cycle narrative continuing and no signals of rate cuts emerging.; The news evidence this period continues to reinforce the judgment that the Fed will not cut rates in 2026. Multiple reports confirm the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with a hawkish dot plot signaling at least one more hike this year. The two-year Treasury yield surged to around 4.75%, well above the current policy rate, indicating the market is pricing in continued tightening rather than rate cuts. Although some traders are betting the pace of hikes may fall short of expectations, this does not alter the overall tightening direction. The baseline likelihood of zero rate cuts remains at an extremely high 95.75%, unchanged from the previous period.
- — Expectation of zero rate cuts remains extremely solid, with the hiking cycle narrative continuing and no signals of rate cuts emerging.; News evidence this period continues to reinforce the judgment that the Fed will not cut rates in 2026. Multiple reports confirm the Fed implemented its first rate hike since 2023 on September 17, raising the benchmark rate by 25 basis points to 3.75%-4.00%, with a hawkish dot plot signaling at least one more hike this year. The two-year Treasury yield has surged to around 4.75%, well above the current policy rate, indicating the market is pricing in continued tightening rather than cuts. Although some traders are betting the pace of hikes may fall short of expectations, this does not alter the overall tightening direction. The baseline likelihood of zero rate cuts remains at an extremely high 95.75%, unchanged from the prior period.