Markets See Rate Cuts Coming—The Fed Isn’t Convinced

[cryptoenthusiast]

A widening disconnect is emerging between financial markets and the Federal Reserve over the path of US interest rates in 2026. While Fed officials continue to signal caution, markets are increasingly confident that rate cuts will arrive by mid-year. Prediction platforms and futures markets are pricing in two to three cuts before December, despite the Fed’s guidance pointing to far less easing.

Data from Polymarket and the CME FedWatch Tool shows overwhelming expectations of a January hold, followed by strong odds of cuts by April or June. In contrast, Fed officials emphasize that inflation must cool further before policy can loosen, setting up a standoff between market optimism and central bank restraint.

[96f402f86e]

inflation “needs to cool more” is doing a lot of heavy lifting here