TD Securities analysts Oscar Munoz and Eli Nir anticipate that the Federal Reserve will maintain the current Fed funds rate throughout 2026. This outlook is based on expectations of sideways US economic growth combined with persistently elevated inflation, according to FX Street.
The forecast suggests a pause in rate hikes as the central bank balances efforts to control inflation without stalling growth. The stable rate environment could influence global capital flows and risk sentiment in the coming years.
For Japanese investors and markets, this steady US rate outlook may support a cautious approach toward USD/JPY movements and impact equity valuations sensitive to interest rate changes.