Analysis: Fed may be disappointed with 2026 rate cut forecast

Interest rate markets are pricing in a long series of Federal Reserve rate cuts, beginning this month, that would take the Fed's target range below 3% by the end of 2026. According to Neil Dutta of Renaissance Macro, this anticipated path of significant rate cuts is unlikely to be reflected in the Fed's September dot plot, putting the Fed on a trajectory that contrasts sharply with market expectations. "With the FOMC meeting approaching, it's difficult to see how the Fed will meet expectations," Dutta wrote. For the September dot plot to be consistent with market expectations, eight Fed officials would have to lower their 2026 dot plot to 3% or lower. (Jinshi)