Current policy stance and 2026 track record so far

• The federal funds target range has been at 3.50–3.75% since December 2025 and has been held unchanged at all 2026 FOMC meetings to date (January, March, April, June, and July) [1][2][3].

• No emergency moves have occurred in 2026; therefore, the count of 25 bp cuts so far in 2026 is clearly 0.

• The July 2026 Monetary Policy Report explicitly notes that the FOMC has maintained the target range at 3½–3¾ percent "since the beginning of the year" [3].

Inflation and growth backdrop

• Inflation: The July 2026 Monetary Policy Report reports 12‑month headline PCE inflation of about 4.1% in May 2026 and core PCE around 3.4% [3]. That’s well above the Fed’s 2% long‑run target.

• The Fed’s June 2026 Summary of Economic Projections (SEP) puts 2026 PCE inflation at a median of 3.6% and core PCE even higher, with inflation only gradually moving down toward 2% by 2027–2028 [1][4][5].

• Growth and labor market: Real GDP growth is projected around 2.2% in 2026 (median), with unemployment around 4.3%—very close to Fed estimates of the longer‑run jobless rate [1][3][5]. The July MPR describes economic activity as expanding at a “solid” pace, with strong productivity and investment, especially in AI‑related sectors, and only specific pockets of weakness (notably housing) [3].

• Overall, macro conditions look like: above‑target inflation + near‑normal unemployment + trend‑like growth. That is a classic environment where the Fed has little urgency to cut and some reason to maintain or even slightly increase restriction.

FOMC projections for the policy path (dot plot)

• The June 17, 2026 SEP gives the median projection for the federal funds rate at end‑2026 at 3.8%, with a central tendency around 3.6% and a range from 3.4% to 4.4% [1][4].

• The current midpoint of the actual target range is 3.625%. A 3.8% median projection implies (roughly) +18 bps from today—i.e., slightly higher rates by year‑end, not lower.

• Interpreted in 25 bp increments, the median implies either no change or a modest net hike (0–1 hikes) by end‑2026, not net cuts. At the low end of the range (3.4%), you could have on the order of one 25 bp cut relative to today; at the high end (4.4%), you’d have multiple hikes [1][4].

• Coverage of the dot plot and minutes indicates a roughly even split: nine policymakers projecting higher rates by end‑2026 and nine projecting unchanged or lower [4][6]. This confirms real uncertainty and some dovish possibility—but the median and central tendency skew away from aggressive easing.

Fed communications and July 2026 policy report

• The July 2026 Monetary Policy Report stresses that inflation “remains elevated” and that the policy stance is intended to bring inflation back to 2% while keeping the labor market near maximum employment [3].

• The same report shows the Fed’s own “appropriate policy path” (median) for the federal funds rate at 3.8% at end‑2026, 3.6% in 2027, and 3.4% in 2028 [3]. This is again slightly higher than the present level, suggesting a bias toward holding or modest tightening rather than easing in 2026.

• Market‑implied paths described in the report show expectations for rates to be near or slightly above current levels by year‑end 2026—on the order of ~3.9%—again inconsistent with multiple cuts [3].

External institutional forecasts

• J.P. Morgan Global Research expects the Fed to remain on hold for the rest of 2026 and not cut until at least mid‑2027, followed by a hike path starting in September 2027 [7]. Under their baseline, 2026 sees 0 cuts.

• Goldman Sachs Research likewise expects no rate cuts in 2026, pushing their first cuts into 2027 (having previously projected an earlier start) [8].

• A Morningstar analysis at the start of 2026 projected two cuts in 2026 (one in the first half, one in the second) [9], but that view is now somewhat at odds with what has actually happened: the first half has passed with zero cuts and a more hawkish inflation backdrop.

• Other commentary from asset managers (e.g., iShares/BlackRock) stresses that the Fed is expected to stay cautious, with elevated inflation and an unclear but not strongly dovish forward path [10].

• Netting these together, large sell‑side and buy‑side institutions skew heavily to 0 cuts; a minority still see scope for 1–2 cuts in a downside or better‑than‑expected inflation scenario.

Remaining calendar and mechanisms for cuts

• Scheduled 2026 FOMC meetings remaining as of late July: September 15–16, October 27–28, and December 8–9 [2].

• Under the resolution criteria, any 25 bp or greater downward move in the target range at or between those meetings (including emergencies) would count as one or more cuts.

• To get, for example, 2 cuts in 2026 from today, you’d need at least 50 bp of cumulative easing across those three meetings or via emergency moves.

• The current inflation and growth backdrop and the Fed’s own projected path do not suggest a strong motivation for that much easing absent an adverse event (e.g., a sharp recession, financial crisis, or a sudden collapse in inflation well below target).

Risk scenarios that could produce cuts

• Downside growth / recession: If the currently solid 2.1–2.2% growth trajectory falters and unemployment rises significantly above 4.5–5%, the Fed could shift to an easing bias even with inflation somewhat above 2%. That could justify 1–2 cuts by December.

• Rapid disinflation: If the energy‑driven and tariff‑related inflation shocks unwind faster than expected and core PCE quickly heads toward 2–2.5%, the FOMC could judge the stance overly tight and trim rates modestly.

• Financial stress / systemic event: A major credit event or financial instability could trigger emergency cuts independent of the baseline macro data.

• These scenarios are possible but not currently the base case. Current data and the Fed’s own projections still show elevated inflation and no imminent recession, which keeps the probability of multiple cuts relatively low.

Constructing a probability view

• On the evidence:

  • Baseline (Fed’s own projections, most major banks): 0 net cuts in 2026.

  • Minority professional forecasts: 1–2 cuts, generally conditional on weaker data than we’ve actually seen so far.

  • FOMC split plus uncertainty around energy prices, geopolitics, and productivity means cuts are not out of the question.

• A reasonable, internally consistent probability distribution would put the highest single probability mass on 0 cuts, with substantial but smaller mass on 1 and 2 cuts, and very little on higher counts.

• A rough but coherent allocation (not needed for resolution but helpful conceptually) might be: 0 cuts ~55%, 1 cut ~25%, 2 cuts ~12%, ≥3 cuts ~8% total.

Why 0 cuts is my single most likely outcome

• Fed’s own median path points to essentially flat‑to‑slightly higher rates by end‑2026, which is inconsistent with any sizeable number of cuts.

• Inflation remains materially above target, with only gradual convergence expected, giving the Fed little cover to ease.

• Labor market and growth are neither weak nor signaling a clear recession, so the Fed is not under strong pressure to support activity through rate cuts.

• Institutional consensus concentrates around no cuts, and the window for action is shrinking, with five meetings already passed without movement.

• At the same time, macro uncertainty (geopolitical energy shocks, AI/productivity surprises, fiscal risk) and the internal FOMC split mean that a non‑trivial probability remains for at least one cut. But that combined probability for all specific positive cut counts is, by my assessment, lower than the probability of exactly zero cuts.

Taken together, this supports 0 cuts in 2026 as the single most likely outcome, with an estimated probability around 55% and a meaningful but smaller chance that we see 1–2 cuts in response to future data surprises.

Implications for the specific market question