Crypto & Forex February 26, 2026 0 Comments

Fed Holds Steady Now, But What Hidden Signals Point to the Timing—and Impact—of Those Future Rate Cuts?

Ever wonder if the Federal Reserve ever just sits back, sips its coffee, and says, “You know what? Let’s chill for a while”? Yeah, me too. Turns out, with the US labor market holding steady and inflation not acting like its usual wild self, TD Securities’ Oscar Munoz and Eli Nir reckon the Fed might just do exactly that—hold tight in the near term. Growth is still hanging tough, inflation’s behaving (well, kinda), and their crystal ball sees a modest 75 basis points of easing in 2026, mostly after the summer heat, assuming inflation keeps strolling back down toward that magic 2% mark. The Fed isn’t rushing to the dance floor yet, and honestly, that steady pace might just be the beat we all need right now. Curious how this all shakes out with those pesky tariffs still sending ripples? Stick around—it’s a story of patience, persistence, and maybe just a bit of Fed finesse. LEARN MORE

TD Securities’ Oscar Munoz and Eli Nir argue that a stable US labor market and contained inflation should keep the Federal Reserve on hold in the near term, even as growth remains firm. They still project 75 basis points of Fed easing in 2026, skewed toward the second half, contingent on inflation resuming its path toward 2%.

Stable jobs and soft core inflation

“Next week’s February jobs report is likely to provide more signs of labor market stabilization, with the UE rate remaining at 4.3%. Our preliminary core CPI forecast at 0.3% m/m points to stabilization in underlying inflation with strength mostly owing to lingering tariff passthrough.”

“A steady labor market together with modest signs of underlying inflation normalization in February should keep the Fed on the sidelines for now. We continue to look for 75 basis points of easing in 2026.”

“Furthermore, our early tracking for the February CPI report supports the view that inflation remains elevated partly due to ongoing tariff passthrough. In effect, we look for core CPI inflation to print a “soft” 0.3% m/m increase in February resulting from a strong showing in core goods inflation.”

“We continue to look for 75 basis points of easing in 2026, with those rate cuts skewed toward the second half of the year. Our thesis for further Fed easing hinges on a constructive outlook for inflation.”

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)