Standard Chartered Bank analysts Nicholas Chia and Steve Englander stated in their report that if the US economy maintains its current momentum, interest rate cuts may become difficult in 2026.
According to analysts, although the Fed will continue to cut interest rates throughout 2025, market expectations for a rate cut in 2026 may decrease if economic growth remains strong and productivity growth exceeds expectations.
The report stated, “Markets are currently pricing in a rate cut of approximately 63 basis points in 2026. However, if the US economy remains strong and productivity growth continues, these expectations may gradually be eroded. This will support US bond yields and the dollar upwards.”
According to prediction market data as of October 29, 2025, the vast majority of investors expect the Fed to cut interest rates by 25 basis points this month:
- 25 basis point interest rate cut: 92% probability
- No change in interest: 6% probability
- Discount of 50 basis points or more: 3% probability
While the markets reached a total trading volume of over $25 million, participants have formed a strong consensus that the Fed will not make aggressive cuts.
*This is not investment advice.