JPMorgan Sees No Rate Cuts as Inflation and War Keep Pressure High

​Fed Cuts May Be Off the Table
JPMorgan is taking one of the most aggressive stances on Wall Street, forecasting no interest rate cuts through 2026. Instead, the bank expects the next move from the Federal Reserve to be a rate hike in 2027.

Inflation Still Too Elevated
Persistent inflation remains the main reason behind the outlook. Price pressures have not cooled enough to justify easing, keeping the Fed in a cautious position.

Strong Labor Market Limits Flexibility
The labor market continues to show resilience, with unemployment remaining relatively low. This strength reduces the urgency for the Fed to cut rates.

War Adds New Inflation Risk
The ongoing conflict is complicating the outlook. Rising oil prices are feeding into inflation, making it harder for the Fed to shift toward a more accommodative stance.

Fed Signals Uncertainty on Cuts
Even Federal Reserve leadership has acknowledged that future rate cuts are not guaranteed. Policy decisions will depend heavily on how inflation and economic data evolve.

Markets Adjusting Expectations
Investor expectations are shifting toward fewer rate cuts. Probabilities for easing have declined as economic conditions remain stronger than expected.

Wall Street Becoming More Hawkish
While JPMorgan is the most extreme in its forecast, other major banks are also pushing back their expectations for rate cuts, signaling a broader shift in sentiment.

Higher Rates for Longer Impact
If rates remain elevated, borrowing costs will stay high across mortgages, loans, and credit markets. This could weigh on consumers and economic activity over time.

Policy Outlook Remains Data Driven
​The Fed’s next moves will depend on incoming data. A slowdown in growth or a drop in inflation could change the outlook, but for now, the path points to prolonged higher rates.