Wells Fargo: Expects the Federal Reserve to cut interest rates five times before mid-2026

Jinse Finance reported that Wells Fargo expects the Federal Reserve to cut interest rates five times by mid-2026, with each cut being 25 basis points. The bank anticipates three consecutive rate cuts at the next three meetings, lowering rates to 3.50%—3.75% by the end of the year, followed by two more cuts in March and June 2026, bringing the rate range down to 3.00%—3.25%. This outlook reflects a weakening labor market, with average job growth in August at only 29,000 and the unemployment rate rising to 4.3%. Inflation remains a challenge, with core PCE up 2.9% year-on-year, but Wells Fargo notes that inflation expectations remain stable. The bank has raised the probability of a U.S. recession next year to 35%, but expects stronger economic growth in the coming years, projecting that as fiscal stimulus and rate cuts take effect, GDP growth will reach 2.4% in 2026.