economy
March 12, 2026
Markets' hopes for Fed interest rate cuts are rapidly fading away
As both energy prices and inflation fears pop higher, expectations for cuts are sliding lower.
TL;DR
- Expectations for Federal Reserve interest rate cuts have significantly decreased.
- Traders now anticipate only one rate cut in December, with no further cuts priced in until 2027 or 2028.
- Rising energy prices, driven by geopolitical events in the Middle East, are a key factor in the shift.
- Inflation fears are paramount, and the Fed is expected to prioritize controlling inflation.
- The personal consumption expenditures price index is expected to show an increase, further indicating inflationary pressures.
- Economists from Goldman Sachs and Bank of America advise against hasty rate cuts.
- The Federal Open Market Committee is expected to keep rates unchanged at its upcoming March meeting.
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