United Overseas Bank (UOB) analyst Alvin Liew said after July US CPI that market odds of a September Fed hike have fallen and UOB’s base case is that the Fed will pause policy through all of 2026. UOB expects two 25bp cuts in 2027, likely at end-Q2 and end-Q4, gradually lowering the federal funds target to about 3.25% by end-2027, which it still views as its terminal rate estimate. While June and July CPI prints have balanced FOMC risks, geopolitical and energy uncertainty leave a slight upside

United Overseas Bank (UOB) analyst Alvin Liew said after July US CPI that market odds of a September Fed hike have fallen and UOB’s base case is that the Fed will pause policy through all of 2026. UOB expects two 25bp cuts in 2027, likely at end-Q2 and end-Q4, gradually lowering the federal funds target to about 3.25% by end-2027, which it still views as its terminal rate estimate. While June and July CPI prints have balanced FOMC risks, geopolitical and energy uncertainty leave a slight upside risk to policy, so UOB remains vigilant to the possibility of tighter policy.