Market commentary suggests investors expect the Fed to hold rates steady at its first scheduled meeting of 2026, with the bigger story being the forward path and the data dependence that follows.
Why a “hold” can still move markets
Even without a rate change, markets react to:
- language on inflation progress,
- labor market commentary,
- financial conditions,
- dots/forecasts and press guidance.
Inflation path expectations
A key Fed voice expressed optimism that inflation could moderate through 2026, while acknowledging uncertainty around where it lands. That uncertainty is exactly why guidance matters: it shapes how CFOs plan financing, capex, and hiring.
Practical business guidance
- If you have refinancing in 2026, consider a laddered approach rather than a single bet on cuts.
- If you’re rate-sensitive, run scenarios for “steady through midyear” vs. “cuts later.”
- Reassess working capital assumptions under different credit conditions.