Most Wall Street Brokers Forecast Two Fed Rate Cuts in 2026, Capping Borrowing Costs at 3.25%

Consumers with variable-rate debt could see a 50 basis point reduction in borrowing costs by the end of 2026, according to a majority of Wall Street brokerages. The projected rate cuts would bring the federal funds rate to a range of 3.00%-3.25%, down from the current 3.50%-3.75%. This shift would lower monthly payments for mortgages, credit cards, and business loans. The first of these cuts is expected as early as June 2026 from some institutions. A second cut would follow in September or December, depending on the firm's forecast. While most banks agree on two rate reductions, Barclays and Deutsche Bank anticipate only one cut, pushing the rate to 3.25%-3.50%. HSBC, J.P. Morgan, and others see no cuts at all in 2026, maintaining the rate at 3.50%-3.75%. Macquarie stands apart, forecasting a rate hike in early 2027.