Wells Fargo projects the Federal Reserve will keep its benchmark rate at the current 3.50 % to 3.75 % target range through the end of 2026. The bank’s economists, led by chief economist Tom Porcelli, argue that US inflation is primarily supply-driven, stemming from tariffs and oil price volatility rather than demand pressures. This assessment suggests that interest rate adjustments would not address the root cause of inflation. Wells Fargo has revised its earlier forecast of modest rate cuts due to stubbornly persistent inflation data, with new Fed Chair Kevin Warsh adopting a cautious wait-and-see posture. For markets, higher-for-longer rates mean elevated borrowing costs, which weigh on companies relying on cheap credit for expansion.
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