On December 11, the Dutch International Bank stated that the market is speculating that the Federal Reserve will have to lower interest rates by another 50 basis points in 2026. However, looking at the current economic situation, it is still growing, the unemployment rate is low, the stock market is nearing historical highs, and the inflation rate is closer to 3%, which is still a distance from the Federal Reserve's target of 2%. It feels like there is no need for the Federal Reserve to further loosen its policies.

However, the Dutch International Bank also believes that the inflation situation in the coming months may become more favorable for interest rate cuts, providing more reasons for those advocating for loose policies to take action. Although the threat of tariffs still exists, its impact is not as immediate or significant as many worry. This allows more time for situations like falling energy prices, slow rent increases, and modest wage growth to help lower inflation. The Dutch International Bank also believes that inflation will drop to around 2% faster than the Federal Reserve expects.

Additionally, the Federal Reserve has a dual mandate, and currently, the employment aspect looks more concerning (it's worth noting that Powell mentioned the Federal Reserve thinks that the employment growth data in recent months has been overstated by 60,000). Therefore, the Dutch International Bank predicts that the Federal Reserve will still cut interest rates twice in 2026, once in March and once in June, with each cut being 25 basis points. #美联储降息