Moody's Chief Economist: Fed rate cuts next year are expected, but patience is needed

BlockBeats News, December 26 — Moody’s Chief Economist Mark Zandi stated that the Federal Reserve may cut interest rates multiple times in 2026. This is not due to economic prosperity but because he believes the economy has entered a delicate balance. In Zandi’s view, this strange combination points to a gradual and cautious interest rate path in the future, rather than an aggressive rate-cutting cycle. Inflation also complicates the Fed’s outlook for rate cuts. 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 US CPI increased by 2.7% year-over-year (core CPI was 2.6%), still above the Fed’s 2% target. He pointed out: “Inflation remains well above the level the Fed desires, and while upside surprises are still possible, the risks are two-sided.” (Jin10)