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Danske Bank: Fed May Hike Twice by 2027

Danske Bank analysts predict the Federal Reserve will raise interest rates in December 2026 and March 2027 to counter inflation, lifting the key policy rate to 4.00%-4.25%. They note that while hikes could come earlier, recent disappointing data has balanced the risks. Money markets currently price in a 23bp hike in December and 33bp cumulative by March 2027.

Original source

AI take

A sell-side call for two hikes sits awkwardly against market pricing that already leans toward one, so the significance lies in the divergence rather than the destination. It matters for rate-sensitive crypto and RWA valuations, which have been trading off the easing narrative. The open question is whether hard data validates Danske's inflation concern or forces markets to reprice in the other direction.

Generated by AI for reference only.

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