JPMorgan’s chief global strategist David Kelly expects the Federal Reserve to keep interest rates exactly where they are at next week’s FOMC meeting. The current federal funds rate sits at 3.50%-3.75%, and market pricing puts the probability of no change at north of 99%.
The case for standing pat
The Fed’s two-day meeting on June 16-17 marks a notable moment: it will be new chair Kevin Warsh’s first vote at the helm. Kelly’s analysis suggests Warsh will prioritize stability and institutional continuity over any dramatic policy pivot.
The Fed cut rates three times in late 2025, trimming the federal funds rate by a total of 75 basis points. Since then, the central bank has been in wait-and-see mode, letting those cuts work through the economy while keeping a close eye on inflation data and fiscal dynamics.
JPMorgan’s broader forecast calls for just two rate cuts across all of 2026, with one additional cut penciled in for 2027. Kelly’s reasoning centers on what he sees as persistent inflationary pressures combined with fiscal factors that make aggressive easing risky.
