JPMorgan Pulls Fed Rate Hike Forecast to December 2026

The U.S. economics team at JPMorgan has moved its projection for the next Federal Reserve rate hike from the second half of 2027 to as early as December 2026. This acceleration in the forecast follows a post-decision press conference held by Federal Reserve Chair Kevin Warsh.

Economists at the bank described Warsh's press conference as the most troubling since the practice began in 2012. The analysis indicates that a lack of forward guidance and shifts in inflation goals have damaged the credibility of the Federal Reserve in its efforts to fight inflation.

These developments have destabilized bonds, which JPMorgan suggests may increase the urgency for the central bank to implement stiffer monetary policy before the end of the current year.