Royal Bank of Canada: The Fed is expected to cut interest rates at this meeting, followed by "no need for further rate cuts"

On December 10, according to Golden Ten Data, Andrzej Skiba, head of U.S. fixed income at Royal Bank of Canada Global Asset Management, said that the Fed may cut interest rates at this meeting, but the economic momentum in the United States may make “no need for further interest rate cuts.” The bank’s underlying assumption is a rate cut, but it could be a hawkish rate cut and could hint at a subsequent pause. “In our view, inflation and labor market data should prompt the Fed to choose to hold its stance after multiple rate cuts and assess it early next year based on economic developments,” Skiba said. Market participants will closely monitor dissenting members, including those advocating more significant rate cuts, as well as those who believe that the U.S. economy does not need to cut interest rates at this time. In our case, after this rate cut, the need for another rate cut may not exist as we expect the US economy to accelerate in 2026. For political reasons (such as the Fed leadership change in May), we may see a rate cut, but the economy itself may not need another rate cut for a foreseeable period of time. ”