Most institutions expect that the Federal Reserve will keep rates unchanged this year, with only Citi and Wells Fargo betting on two rate cuts, while Macquarie and BNP Paribas anticipate a rate hike.

⑴ Most global brokers expect the Federal Reserve to keep rates unchanged for the remainder of 2026, reversing earlier expectations of two rate cuts at the start of the year. The June meeting, chaired by the new chair Walsh, kept the policy rate unchanged, but 9 out of the 19 policymakers believe a rate hike is necessary within the year. After the decision, traders’ expectations for a rate hike in December rose from 61% to 87%. ⑵ There is a clear divergence among major institutions: Citigroup and Wells Fargo expect two rate cuts totaling 50 basis points this year, bringing the rate down to 3.00%-3.25%, with actions in October and December, respectively. In contrast, UBS Global Wealth Management, UBS Global Research, Goldman Sachs, Nomura, Bank of America Global Research, Barclays, Morgan Stanley, Deutsche Bank, HSBC, JPMorgan, Wells Fargo Investment Institute, Standard Chartered, and Societe Generale all expect no policy change this year, with the benchmark rate remaining at 3.50%-3.75%. ⑶ Macquarie expects one rate hike in the fourth quarter to 3.75%-4.00%, while BNP Paribas forecasts a 25 basis point rate hike in December to 3.75%-4.00%. The path for the Federal Reserve remains highly uncertain, with subsequent inflation data and labor market performance being key variables determining the direction of policy.