Wells Fargo expects Federal Reserve to hold rates steady through 2026

Wells Fargo’s economics team is betting the Federal Reserve will keep its hands off the rate dial for the rest of 2026. The bank projects the federal funds rate will stay locked at its current 3.50%-3.75% target range through year-end, a forecast that reflects a broader market reckoning with inflation that just won’t quit. Chief economist Tom Porcelli has been reinforcing this view as recently as early August, arguing that the inflation pressuring the US economy is largely supply-driven. Tariffs and oil price swings, in his assessment, aren’t the kind of problems you solve by tweaking interest rates. From rate cuts to rate patience The forecast represents a notable pivot for Wells Fargo itself. Earlier in 2026, the bank’s economists had anticipated modest rate cuts as part of a gradual easing cycle. That expectation got shelved as incoming inflation data stubbornly refused to cooperate. Multiple brokerages have pulled back their earlier projections for rate cuts this year. Some have even floated the possibility of a modest rate hike later in 2026, though that remains a minority view. The Fed’s recent meetings have done little to challenge the hold-steady consensus. Policymakers hav...