QNB expects the US Fed to cut twice in 2026

Doha, Qatar: QNB said Saturday that it expects the US Federal Reserve to continue gradually easing its monetary policy and to implement two additional...

Doha, Qatar: QNB said Saturday that it expects the US Federal Reserve to continue gradually easing its monetary policy and to implement two additional interest rate cuts this year, bringing the rate down to 3.25%.

In its weekly note, QNB said that the impact of geopolitical tensions and commodity price volatility will be limited, despite adding complexity to the macroeconomic outlook for 2026. It also noted that these tensions were unlikely to disrupt the broader trend of declining inflation in the US economy, highlighting that supply-side effects on inflation will remain limited, while labor market conditions were likely to soften gradually.

The report said that these combined factors support the bank’s expectation that the Federal Reserve will continue gradually easing policy, with two additional rate cuts this year to reach 3.25%.

QNB also highlighted its positive outlook for the US macroeconomic environment at the start of 2026. It noted that strong capital expenditure driven by artificial intelligence, improved productivity dynamics, and the gradual normalization of housing inflation are expected to create a favorable economic environment. In such a scenario, economic growth would remain strong while inflation continues to decline.

It added that these factors would be supported by the continuation of the Federal Reserve’s easing cycle, which began in September 2024, leading to a gradual shift toward more accommodative monetary policy.