TechFlow, Dec 11 — According to Jinshi Data, ING Bank stated that markets expect the Federal Reserve to cut interest rates by another 50 basis points in 2026. Given that the economy is still growing, unemployment remains low, stock markets are near record highs, and inflation is closer to 3% rather than the Fed's 2% target, there appears to be little immediate need for further monetary easing.
Nevertheless, ING believes the inflation backdrop will become more favorable for rate cuts in the coming months, providing dovish policymakers with further justification. Although tariff threats persist, their impact has been slower and weaker than feared. This allows more time for falling energy prices, slowing growth in housing rents, and weakening wage growth to ease inflationary pressures. ING expects these factors to drive inflation toward 2% faster than the Fed currently anticipates.
Moreover, given growing concerns regarding the employment component of the Fed's dual mandate—especially considering Powell’s comment that recent job growth figures may have been overstated by 60,000—the bank forecasts two rate cuts in 2026, with 25 basis point reductions expected in both March and June.
