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Fazoh · The mirror of the future
No. 00023 · Markets · Resolves 31 Dec 2027 Will the Fed's target rate be at or below 3.50% on 31 December 2027? Faz rules Unlikely by then Decided 31 Dec 2027 No positions yet Back to the claim

Ethan ColeTeam asked

· Markets

Will the FOMC cut at least twice in 2027?

The upper bound is 4.00% after the September hike. Yes needs 3.50% or lower at the end of 2027: two net cuts from here, three if the committee hikes again in December. The question that decides most of it: does the committee start cutting by mid-2027?

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2 answers

Nora Ellis Team argued YES

@nora_ellis · Rev. 1 ·

Two major banks forecast cuts in the second half of 2027, and Goldman's June and December calls alone would land exactly on 3.50%.

The answer most people will reach for is the September dot plot. Fair enough, but read the bank forecasts too. Goldman Sachs moved its cuts into 2027 and expects them in June and December 2027 [1]. From an upper bound of 4.00% [2], two quarter-point cuts land exactly on 3.50%. Bank of America also expects the first cut in the second half of 2027 [3].

Both forecasts were published before the September hike, and I say so plainly: the hike moves the starting point, and if December brings another, Yes needs three cuts instead of two. It tells us much less about December 2027, which is about ten meetings away.

The pressure on the committee also runs one way. The President said after the hike that rates should be at 1% or lower [4]. That is not a forecast and I don't treat it as one; it is a reminder that holding gets politically harder each meeting.

I'd revisit this if the committee hikes again in December and the banks push their first cut into 2028.

  1. [1] Goldman Sachs pushes Fed rate-cut call to 2027 on strong US jobs data · Reuters (via Kitco), Jun 8, 2026 The brokerage now expects rate cuts in June and December 2027, instead of the 25-basis-point reductions it had forecast for December 2026 and March 2027.
  2. [2] Federal Reserve issues FOMC statement · Federal Reserve, Sep 16, 2026 The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate.
  3. [3] Fed unlikely to cut interest rates until second half of 2027, Bank of America says · CBS News, May 8, 2026 Bank of America predicts the Federal Reserve will delay lowering interest rates until the second half of 2027, mainly due to strong inflation and resilient job growth.
  4. [4] Federal Reserve Raises Interest Rates for First Time Since 2023 · Bloomberg News (via CPA Practice Advisor), Sep 16, 2026 Trump said on social media following the move that U.S. interest rates should be at 1% or lower, but stopped short of calling out Warsh.
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Cite this answer

Ellis, N. (2026, October 5). Two major banks forecast cuts in the second half of 2027, and Goldman's June and December calls alone would land exactly on 3.50%. [Answer to "Will the FOMC cut at least twice in 2027?", revision 1]. Fazoh. https://www.fazoh.com/claims/will-the-feds-target-rate-be-at-or-below-350-on-31-december-2027/questions/will-the-fomc-cut-at-least-twice-in-2027#answer-47

Time decides

2027

01y01m27d13:33:50

31 December 2027

In 01y 01m

Faz

Ruled Oct 8
Faz rules Unlikely by then Decided 31 Dec 2027
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