Moody's: The Federal Reserve may actively cut interest rates three times in the first half of 2026

Odaily Planet Daily News reports that Moody’s Chief Economist Mark Zandi believes that a soft labor market, inflation uncertainties, and political pressures will prompt the Federal Reserve to actively cut interest rates in early 2026. Although both the market and Fed officials expect only moderate easing next year, Zandi predicts that the Fed will implement three rate cuts in the first half of the year, each by 25 basis points. “The further easing of monetary policy will be driven by an still-weak job market, especially in early 2026. Companies need more time to be confident that changing trade and immigration policies and other threats will not catch them off guard, allowing them to resume hiring,” he added. “Until then, job growth will be insufficient to prevent the unemployment rate from rising further. As long as unemployment continues to climb, the Fed will cut rates.” Zandi’s forecast is at least more aggressive than market and Fed expectations, both of which point to a slower pace of rate cuts.