Wells Fargo: Fed expects five rate cuts by mid-2026

According to Golden Finance, Wells Fargo, the Federal Reserve expects the Federal Reserve to cut interest rates five times by mid-2026, at 25 basis points each time. The bank expects to cut interest rates in the next three meetings, reducing the interest rate to 3.50%-3.75% by the end of the year, and then cut interest rates twice in March and June 2026, reducing the interest rate range to 3.00%-3.25%. This outlook reflects a weak labor market, with average jobs rising by only 29,000 in August and the unemployment rate rose to 4.3%. Inflation remains a challenge, with core PCE rising 2.9% year-on-year, but Wells Fargo noted that inflation expectations remained stable. The bank raises the likelihood of a U.S. recession next year to 35%, but expects growth to be stronger in the coming years, with GDP growth expected to reach 2.4% in 2026 as fiscal stimulus and interest rate cuts take effect.