Danske Bank Delays Fed Rate Cut Expectation

BlockBeats News, May 20th, analysts from Danske Bank Research Center stated in a report that due to the recent easing of the economic recession risk driven by tariffs, the institution has delayed its prediction of a Fed rate cut. Danske Bank now expects the next Fed rate cut to occur in September, a quarter later than previously predicted in June. However, they maintain their forecast for the terminal interest rate at 3.00%-3.25%.

With the Fed starting to cut rates every quarter, the terminal rate is now expected to be reached by September 2026. A loose financial environment, lower tariffs, and macroeconomic data in April that exceeded expectations have reduced the immediate need for a rate cut. However, in the long run, the slowdown in structural growth and sluggish credit expansion still indicate further rate cuts in the future. (FXStreet)