BlackRock strategists expect limited rate cuts in 2026 unless labor market cracks

BlackRock senior strategists Amanda Lynam and Dominique Bly project that the Federal Reserve will implement only limited interest rate cuts in 2026. This forecast is based on recent US labor market data showing modest softening but no sharp downturn. Although the unemployment rate reached 4.6% in November, BlackRock attributes some of this rise to increased labor force participation and government job losses, rather than fundamental weakening. With 175 basis points of cuts already delivered since September 2024, policy rates are nearing neutral territory, limiting the justification for aggressive easing. BlackRock's base case does not include a sharp deterioration in labor conditions, meaning more substantial cuts would only occur if the labor market breaks down significantly.

(Source：Crypto Briefing)