Although the Federal Reserve (Fed) is currently easing monetary policy, HSBC analysts predict that the Fed may raise interest rates again in 2026. This forecast is unexpected because the Federal Reserve has successively cut interest rates and the market generally believes that interest rates will remain low. HSBC analysts noted that although inflation has declined, supply-side shocks, such as tariffs and immigration policy changes, could lead to higher interest rates.
Analysts at HSBC said: "After 14 months of keeping interest rates steady, the Fed has cut interest rates by 50 basis points, a move that echoes similar actions by the European Central Bank (ECB) and other G10 central banks." They also pointed to global economic conditions. , political developments and market fluctuations may affect the Fed's future decisions. HSBC believes that the outcome of the US presidential election will be a key factor that may have an impact on fiscal and monetary policy.
HSBC analysts put forward two possible scenarios: one involving fiscal tightening and further interest rate cuts, while the other sees a supply-side shock that could lead to higher interest rates. "Regardless of whether Jerome Powell remains as Fed chairman after his term ends in May 2026, the latter scenario could force the Fed to raise interest rates," HSBC analysts said.
HSBC analysts also admitted that if the economy experiences a hard landing, the Federal Reserve may still continue to cut interest rates in 2026. "Of course, it's also possible that the Fed has already started raising interest rates again by 2026, not because of political choices, but simply because the economy is responding more strongly than expected to the ongoing monetary easing cycle," HSBC analysts said. It also emphasized that if the Fed lags behind the situation and the United States experiences a hard landing in 2025, the Fed may still continue to cut interest rates in 2026.
It is worth noting that the Federal Reserve's decision-making is affected by many factors, including inflation rate, unemployment rate, economic growth, etc. HSBC's forecasts are based on current information only and actual conditions may differ. Currently, the market has different views on the Fed's future interest rate trends, and investors need to pay close attention to the Fed's dynamics in order to make informed decisions.
The content of this article is for reference only and does not constitute investment advice or an invitation, solicitation or recommendation for any investment product. Readers are advised to make their own judgment and seek professional advice.
Any information on the 852Fin platform ("852Fin Information"), including but not limited to product comparisons, product ratings, blog articles, etc., is for general education and reference purposes only and does not constitute or intend to constitute any regulated advice, trust, immigration , insurance, finance, investment or other professional advice, recommendation, approval, endorsement, invitation, sale of insurance, trust, immigration, financial or investment products.
852FIN reminds readers that the content contained in this article/video is mainly from public information online and does not constitute any professional advice. Readers should seek professional advice with specific questions about products or services.
852Fin Information does not consider your personal needs, and reading the relevant information should not be regarded as a personal suitability assessment, nor can it form the basis for any decision to purchase products/services.
852FIN and the author of the pen column are not responsible for any loss or damage caused by the information contained or omitted in the article.
Before purchasing any product or service, you should conduct your own research based on the information provided by the company that provides you with the product or service, and/or seek independent and professional advice from a licensed professional. 852Fin information is collected, verified, and updated from different channels with our best efforts. 852Fin and its related parties, agents, directors, officers, and employees will not be held liable for any claims or losses arising from the relevant information. 852Fin also does not guarantee or guarantee the accuracy, completeness and timeliness of the relevant information.
Discussion about this post