Markets Expect Only Two More Fed Rate Cuts in 2026 Despite Trump Pressure

Wall Street economists project the Federal Reserve will implement only two additional 25-basis-point rate cuts in 2026, bringing the federal funds rate to around 3%, according to a CNBC survey published Tuesday, January 27. This contrasts with former President Trump's calls for significantly lower rates and reflects expectations that economic growth and persistent inflation will limit the Fed's easing capacity. The survey indicates GDP growth forecasts of 2.4% for 2026 and 2.2% for 2027, both above the Fed's long-term potential growth estimate. Inflation is projected to decline to 2.7% by year-end 2026 and 2.5% by 2027. Meanwhile, recession probability for the next year has fallen to 23% from 30% in December. Half of respondents expect Trump to appoint former Fed Governor Kevin Warsh as next chair, though markets express concern over central bank independence.