Moody's Chief Economist: While Fed Rate Cut Next Year Is Possible, Patience Is Needed
BlockBeats News, December 26th, Moody's Chief Economist Mark Zandi stated that the Fed may cut interest rates multiple times in 2026, not because of economic prosperity, but because he believes the economy is in a delicate balance.
In Zandi's view, this peculiar combination signals a future of a gradual, cautious rate path rather than an aggressive rate-cutting cycle.
Inflation has also made the Fed's interest rate cut outlook more complicated. Zandi believes that the CPI is closer to 3% rather than the Fed's target, affecting the speed at which policymakers take action. Official data supported his argument, with U.S. CPI rising by 2.7% year-on-year in November 2025 (core CPI at 2.6%), still above the Fed's 2% target. He pointed out: "Inflation remains well above the level the Fed would like to see, and while upside surprises are still possible, the risk is two-sided." (FX Street)
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