Only in June does a plurality—41.9%—emerge for a further cut to 3.25%.
Analysts are all over the place in their guesses about how many further rounds of cheaper money the Fed will deliver next year, and with good reason: President Trump is set to replace Powell with a new Fed chair in May.
“But does this matter, given that we know the Federal Reserve’s structure is changing?” Knightley wrote.
Pantheon Macroeconomics’ guess is for three cuts, “We expect 75bp of easing in 2026, but fiscal policy and FOMC personnel changes cloud the outlook.”
It’s not certain if the new appointee will tip the Federal Open Markets Comittee into a more dovish position (favoring more cuts) or whether the Fed’s institutional commitment to apolitical economics will prevail, which would imply a slower schedule of cuts or perhaps—if inflation continues to rise—none at all.
ING’s Knightley noted that by the end of 2026 it is possible that “five of the seven members of the Board of Governors are Trump appointees.” The Fed is about to become much more unpredictable, in other words.
Here’s a snapshot of the markets ahead of the opening bell in New York this morning:
