Wells Fargo Sees Fed Hiking 25 Bps in 2026, Another in 2027

Wells Fargo Investment Institute has revised its interest rate forecast for the U.S. Federal Reserve to a more hawkish stance, now expecting a 25 basis point rate hike in 2026. The firm had previously predicted the Fed would keep rates unchanged this year. The institute also anticipates an additional 25 basis point rate increase in 2027. Under this scenario, the federal funds rate range is projected to rise to 4.00-4.25 percent. Wells Fargo's updated outlook signals a shift from its earlier expectation of no policy changes by the central bank this year, reflecting a more aggressive tightening path over the next two years.