US Fed Rate Cuts to be Delayed

ANZ Research has pushed back its expectation for the first Fed rate cut to December 2026 due to the Strait of Hormuz closure and rising term premia. Despite this delay, the report highlights weakening US consumption and a deflating labor market as supports for eventual cuts.

Key Takeaways

• 1.ANZ has delayed its forecast for the first Fed rate cut from September to December 2026, followed by two more cuts in 1H 2027.
• 2.The delay is driven by the closure of the Strait of Hormuz and rising bond yields/term premia, despite weakening US private consumption.
• 3.The US labor market is showing structural weakness with a 1.5m decline in the labor force in 2026 and excess labor supply which is disinflationary.

Table of Contents

• Author
• Contact
• US: Fed rate cuts to be delayed
• The labour market is deflating
• ANZ Research's view
• Important Notice

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