Wall Street has seen a rare and significant divergence in opinions about interest rate trends in 2026. In simple terms, no one can confidently predict what the Federal Reserve will do next.

Why is this happening? There are a few main reasons.

First, even within the Federal Reserve itself, there is no consensus. During the December meeting, opinions among Fed officials about whether to cut rates and by how much varied quite a bit. At the same time, they also raised their forecasts for economic growth next year, which essentially signals: we're not in such a hurry to cut rates.

Second, economic signals are particularly contradictory. Inflation remains above the target, but there are signs of weakness in the labor market. Plus, potential fiscal stimulus policies could support economic growth and influence the Fed's stance. It's like being torn between wanting to cut rates and not being able to pull the trigger—very tangled.

Most importantly, Chairman Powell's term will expire in May 2026. Who the new chair will be and what they will do is the biggest uncertainty.

JPMorgan Chase's recent forecast has indeed shifted dramatically—completely removing all expectations of rate cuts in 2026 and instead predicting rate hikes in 2027. This change is quite significant, and it’s better to be cautious until it’s officially confirmed or widely followed by mainstream financial media.

The key points to watch going forward are: the Federal Reserve's official December meeting minutes, the January policy meeting, the PCE price index, non-farm employment data, and the reactions from major media outlets like Bloomberg and Reuters to these forecasts.