USD: Fed patience tempers 2026 easing hopes – Deutsche Bank
|Deutsche Bank analysts highlight patient-sounding Federal Reserve commentary as officials stress the need for more evidence of inflation moving toward 2% before easing. Governor Barr signalled rates may stay steady for some time, prompting markets to slightly reduce 2026 rate-cut pricing. Two-year Treasury yields edged higher, while longer maturities were little changed, leading to modest curve flattening.
Fed rhetoric reins in cut expectations
"Alongside the data, we received some patient-sounding Fed commentary."
"Fed President Goolsbee reiterated that further evidence of inflation moving back towards 2% would be required before easing, while Fed Governor Barr said that “it will likely be appropriate to hold rates steady for some time”."
"Markets slightly dialed down expectations for rate cuts, with 60bps of 2026 easing priced by yesterday’s close (-2.3bps on the day)."
"In turn, 2yr Treasury yields edged higher (+2.7bps), while 10yr (+1.1bps) and 30yr (-0.6bps) saw muted moves, resulting in some curve flattening."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.