Fed rate cut by December 2026 meeting?

Analysis

The hawks have a point about sticky prices — but they're fighting the last war. The real story is what's happening to jobs. Unemployment creeping higher and payrolls cooling is exactly the pattern that historically gets the Fed off the fence before year-end. Yes, two of the five models here see this as a hold-through-2026 situation, and they're not crazy. Inflation running hot gives the committee political cover to wait. But the Fed doesn't need a recession to justify one cut — it needs a reason, and a softening labor market is exactly that. Here's what people keep missing: this question isn't about June. It's about December. That's five whole meetings, months of data, and energy prices that can cool as fast as they rise. The delay everyone is pricing in sounds like cancellation — it isn't. The Fed almost never sits on its hands through an entire calendar year when the jobs picture is quietly deteriorating. One cut doesn't mean they've surrendered on inflation — it means they're threading the needle like central bankers always do when the calendar starts running out. The sticky-inflation bear case is real and worth respecting, not dismissing. But the window is too wide and the labor signal too consistent to bet against it. I'd back Yes — five meetings is a lot of rope, and this Fed will eventually use it.