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Current Affairs February 5, 2026 Global Strategist @ eCalcy 10 min read
The Federal Reserve 2026 Outlook: Interest Rate Pivot?
As inflation stabilizes, will the Fed start cutting rates in 2026? Analysis of market expectations and their impact on global stocks.
With the 2026 Spring meeting approaching, all eyes are on the Federal Reserve. After a long period of "higher for longer," the market is pricing in a potential pivot.
Inflation vs. Growth
The latest CPI data shows inflation nearing the 2% target. However, the labor market is showing slight cooling. This dual-mandate dilemma means the Fed might opt for a series of 'insurance cuts' starting from March 2026 to ensure a soft landing.
Impact on Mortgages and Loans
If the Fed cuts rates, we expect mortgage rates to follow suit. For those planning to buy a home or refinance an existing loan, the Q2 of 2026 might be the strategic window they've been waiting for.