Potential Impact of U.S. Economic Strength on Future Fed Rate Cuts

According to BlockBeats, Standard Chartered analysts Nicholas Chia and Steve Englander have indicated in a report that while the Federal Reserve is expected to continue cutting interest rates for the remainder of 2025, the likelihood of further rate cuts in 2026 may diminish if the U.S. economy maintains strong momentum. The analysts highlighted that in the medium to long term, this scenario could lead to an increase in the U.S. dollar and Treasury yields. They noted, "We believe that the market's expectation of approximately 63 basis points of rate cuts by the Federal Reserve in 2026 may gradually be removed, especially if U.S. economic momentum persists and productivity growth exceeds expectations, which will drive yields and the dollar higher."