Fed rate cut outlook and 2026 market strategy (with Haslinda Amin)

Yields cautious down , medium term, interviewee explicit

explicit

NDX up , medium term, interviewee implicit

implicit

RUT

Oil

Metals

USD

JPMorgan 9.0
Investment Bank $3170.00B
Marcella Chow 8.5

Fed rate cut outlook and 2026 market strategy (with Haslinda Amin)

yields

Right now we are expecting two more after tomorrow, probably two more 25 basis point cuts by middle of 2026. Expect the rate to reach neutral level around 3% by mid-2026. Based on Fed's risk management focus on labor market weakness and maintaining growth momentum, with easing bias but data-dependent pace.

12/1/2025 2:17:57 PM	medium term up	20 days later	+2.03%	+2.03%
11/21/2025 1:54:47 PM	medium term up	21 days later	+3.57%	+3.57%
11/7/2025 6:12:18 PM	medium term cautious down	21 days later	-0.34%	+0.17%
11/4/2025 12:53:31 PM	medium term cautious up	20 days later	-3.73%	-1.86%
10/30/2025 1:40:41 PM	medium term cautious up	20 days later	+0.12%	+0.06%
10/29/2025 8:30:24 PM	short term cautious down	5 days later	-0.10%	+0.05%
10/21/2025 2:15:04 PM	short term cautious down	5 days later	+1.11%	-0.56%
10/16/2025 5:42:00 PM	medium term cautious up	20 days later	+2.15%	+1.07%
10/1/2025 3:11:20 PM	medium term cautious down	20 days later	-3.30%	+1.65%
9/30/2025 10:13:15 PM	medium term cautious down	20 days later	-3.48%	+1.74%
9/22/2025 5:25:48 PM	medium term up	20 days later	-1.67%	-1.67%
9/17/2025 6:49:25 PM	medium term cautious down	20 days later	+0.61%	-0.30%
9/11/2025 11:57:02 PM	medium term cautious up	20 days later	+0.66%	+0.33%
9/11/2025 4:51:16 PM	short term down	5 days later	+0.37%	-0.37%
9/10/2025 9:53:06 PM	short term cautious down	5 days later	+0.37%	-0.19%
9/10/2025 6:33:02 PM	short term cautious down	5 days later	+0.37%	-0.19%
8/28/2025 1:07:30 PM	short term cautious down	5 days later	-0.38%	+0.19%
8/15/2025 9:10:00 PM	short term cautious down	7 days later	-1.52%	+0.76%
8/12/2025 4:29:28 PM	medium term cautious up	20 days later	+0.92%	+0.46%
8/8/2025 2:04:22 AM	short term cautious down	7 days later	+1.59%	-0.80%
8/4/2025 11:59:32 PM	short term down	6 days later	+1.84%	-1.84%

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Even as you're pricing in two rate cuts next year, it is pretty much data dependent, can't be so sure.

Haslinda Amin
Marcella Chow

During the meeting tomorrow, most likely Chairman Powell is going to highlight it's going to be a meeting by meeting approach. The dot plot should be roughly similar to last time. Market will pay attention to risk assessment going forward - if more balanced, it might set a more hawkish tilt.

Given the JOLTS report overnight was slightly better than expected, that might suggest as a hawkish market tilt that there might need to be more labor market weakness to warrant further rate cuts.
The rate cuts we're anticipating is pretty unusual - usually Fed cuts when growth is slow and inflation is low, not the situation right now.

Haslinda Amin
Marcella Chow

It is pretty divided since previous few meetings. It seems right now as a risk management move and they are focusing more on the labor market weakness from recent few data points.

We do not expect the JOLTS data to change sentiment for tonight's meeting. Going forward, focusing on labor market weakness to ensure growth momentum can be sustained in 2026.
Where do you see Fed funds by end of 2026, bearing in mind Trump wants the long end of the curve to be much lower.

Haslinda Amin
Marcella Chow

Right now we are expecting two more after tomorrow, probably two more 25 basis point cuts by middle of 2026. Expect the rate to reach neutral level around 3% by mid-2026.

But it will depend on data - first half of 2026 might be boosted by temporary tax rebates and higher disposable income that might cause inflation to remain sticky. Still an easing bias.
30-year yields expected to rise to above 5% and perhaps stay above 5% - what's your take?

Haslinda Amin
Marcella Chow

Going forward with Fed chair election process still in progress, focus will still be there. Also because of fiscal deficit or Fed independence remains in question.

Recently this was mostly happening in first or second quarter. Since fourth quarter, market focus remaining on dual mandate - inflation seems weaker than expected but labor market remains weaker. That's why Fed focusing on maintaining dual mandate and ensuring growth momentum.
Some say we might see tale of two halves in 2026 - stronger first half and weaker second. How would you deploy capital?

Haslinda Amin
Marcella Chow

Given current earnings momentum and economic growth still relatively resilient, that should sustain for first half of 2026 and be constructive on equities. As fiscal support wanes and inflation remains sticky in second half, we advise investors to move to more balanced stock-bond portfolio and look for alternative income assets.

Global market momentum still constructive for risk assets as we're still in a rate cutting cycle, led by AI in US and broadening to Asia Pacific.
Which sectors see best opportunities? Do we still play AI theme in 2026 as big as 2025?

Haslinda Amin
Marcella Chow

For AI, we remain constructive on data centers and computing power. But difference to 2025 - there will be more divergence going forward. Identifying or being active in company selection remains key.

Key will be ones that can overcome supply constraints like electricity supply for data centers. Those will differentiate and yield better return. In second half 2026, shift to higher quality defensive portfolio with focus on defensive sectors like financials, energy, utilities.

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