S&P 500 and Fed Funds Target Rate When the Fed cuts rates outside of a recession, U.S. stocks typically perform well. However, a perceived “too dovish” cut, signaling excessive economic worry, could disrupt the ongoing year-end stock rally. Image: Bloomberg
Fed Funds Rate – 2026 Year-End Rate Levels Expectations Deutsche Bank’s latest poll of 40 global market participants shows expectations for the fed funds rate at end-2026 anchored near 3.2%, regardless of whether Powell keeps rates unchanged or opts for a 25-basis-point cut today. Image: Deutsche Bank
Fed Funds Rate and Fed Funds Futures Deutsche Bank is sticking to its call for a 25-basis-point Fed rate cut in December 2025 and sees the fed funds rate ending 2026 in the 3.25% to 3.5% range. Image: Deutsche Bank
Fed Funds Rate – Target Probabilities at the Fed’s FOMC Meeting Traders are showing renewed optimism for a Fed rate cut at the December 10, 2025 FOMC meeting, pricing in a 71% chance of a 25-basis-point move lower. Image: CME Group
Fed Funds Rate and 10-Year U.S. Treasury Yield The S&P 500’s record-breaking rally shows no signs of cooling, with market participants now positioning for another Fed rate cut on October 29 to fuel the next leg higher. Image: Goldman Sachs Global Investment Research
Flows into Metals Funds Commodity funds—especially those tracking gold and silver—have seen a surge of inflows in recent weeks, fueled by geopolitical jitters, bets on Fed rate cuts, and steady central bank buying. Image: Goldman Sachs Global Investment Research
Inflation – Fed Funds Rate and CPI With the Fed funds rate still running well above inflation, policy looks overly tight—and investors are betting on deeper rate cuts to follow. Image: Real Investment Advice
Fed Funds Rate and S&P 500 TTM EPS Growth Strong EPS growth, combined with Fed rate cuts, often fuels equities by reducing funding costs, boosting investment and sustaining earnings momentum—the classic drivers of bull markets. Image: TS Lombard
Fed Funds Rate By the end of 2026, Goldman Sachs anticipates four 25-basis-point cuts and expects the Fed to loosen monetary policy more than markets foresee, driven by worries about weaker employment growth and inflation dynamics. Image: Goldman Sachs Global Investment Research
U.S. 2-Year Treasury Yield vs. Fed Funds The current 2-year U.S. Treasury yield, which is below the fed funds rate, signals that monetary policy is restrictive. It also implies the Fed is about 80 basis points behind the curve in cutting rates. Image: Real Investment Advice
Fed Funds Rate Scenario Analysis In its baseline scenario, Goldman Sachs forecasts that the Fed will cut interest rates from 4.3% to 3.1% by the end of 2026. Image: Goldman Sachs Global Investment Research