Moody’s Chief Economist: Fed Rate Cuts Expected Next Year, But Patience Is Needed

BlockBeats News, December 26, Moody's Chief Economist Mark Zandi stated that the Federal Reserve may implement multiple interest rate cuts in 2026, not because of economic prosperity, but because he believes the economy has entered a delicate balance.

In Zandi's view, this unusual combination points to a gradual and cautious interest rate path in the future, rather than an aggressive rate-cutting cycle.

Inflation has also made the outlook for Federal Reserve rate cuts more complicated. Zandi believes that the CPI is closer to 3% rather than the Fed's target, which affects the speed at which policymakers take action. Official data supports his argument: in November 2025, the U.S. CPI rose 2.7% year-on-year (core CPI was 2.6%), still above the Fed's 2% target. He pointed out, "Inflation remains well above the level the Fed would like, and while upside surprises are still possible, the risks go both ways." (Golden Ten Data)