The Fed will keep cutting in 2026

GCC credit remains well supported

Divisions will be more apparent in Federal Reserve policymaking in 2026 amid mixed economic data.
The composition of the Fed next year is in question and in particular its leadership which will likely lean more dovish.
We expect the Fed to cut by another 75bps in total in 2026 with the front end of the US Treasury curve gaining while longer-term bonds reflect more concerns over the US government’s fiscal path.
After record volumes for issuances in 2025, GCC borrowers will take advantage of lower rates to meet borrowing needs amid lower oil prices