John Luke Tyner, Head of Fixed Income at Aptus Capital Advisors

The Fed is almost certain to cut rates twice in 2025 as its focus shifts toward the labor market and inflation pressures ease.

However, the sustainability of the rate-cut cycle will be questioned in 2026. Markets expect roughly three additional cuts, bringing the federal funds rate down to around 3%.

Tyner warns that as policy easing transmits with a lag, the economy could re-accelerate while energy prices rebound — potentially pushing inflation higher again.