Wolfe Research Adjusts Rate Cut Outlook to 2027 for Financial Stability

Wolfe Research has revised its Federal Reserve outlook, predicting that anticipated interest rate cuts will be delayed until the second half of 2027. This adjustment follows concerns about the rising disconnect between climbing bond yields and resilient equity markets. U.S. Treasury yields increased by as much as 12 basis points, reaching recent highs amid renewed inflation worries. The forecast suggests that unless economic growth weakens or equities decline significantly, high rates may persist, impacting risk assets negatively.