Betting platforms in the US are hesitant to make predictions about the Fed’s interest rates for 2026 under conditions of "stalled progress" towards 2% inflation, uneven but steady economic growth, and initial signs of a softening labor market. This is stated in a new forecast by HSBC, which warns that the coming year may pose a challenge to investor expectations.

After a strong 2025 for Treasury bonds, the bank believes that the Federal Reserve's ability to meet market hopes for sharp rate cuts will be limited by both structural and cyclical factors. HSBC anticipates a yield of 4.30% on 10-year Treasury bonds by the end of 2026—higher than the Bloomberg consensus—and a slight increase to 4.40% by the end of 2027. The bank maintains a neutral position on duration.

HSBC considers several scenarios. If inflation unexpectedly accelerates, yields could test the 5% area, especially if questions arise about the independence of monetary policy. Conversely, a softer economic cycle could provoke a "significant bullish steepening of the yield curve." As a result, the bank views the risk balance as "asymmetric," skewed towards further increases. Experts see positioning in the "belly" of the curve as the most attractive, where structural risks are lower, and yields remain acceptable.

HSBC also notes that potential personnel changes in the rate-setting committee, including the expected departure of Jerome Powell in mid-2026, will add uncertainty to the FOMC’s agenda. Regarding the Federal Reserve's operations, the bank foresees the start of "net asset purchases" in Treasury bills as early as the first quarter of 2026 to alleviate funding pressures as liabilities outside of reserves grow.

On the supply side, HSBC suggests that the sizes of coupon auctions will remain stable in the first half of 2026, but an expansion of issuances is likely to appear on the horizon, most probably in the fourth quarter, considering the increasing budget deficits. The bank also points out that swap spreads do not fully reflect these risks, creating the possibility that long-term Treasury bonds may show weak performance relative to swaps in the coming months.