The rate-cutting cycle in leading economies will have run its course by the end of 2026, according to new forecasts from the OECD that suggest most major central banks have little scope to loosen policy further even though economic growth is set to moderate. 

The Paris-based organisation expects the US Federal Reserve to cut interest rates just twice more by the end of 2026, before keeping the federal funds rate at 3.25 per cent to 3.5 per cent throughout 2027 as it balances the inflationary effects of tariffs against a weakening labour market. 

The OECD published its latest forecasts on Tuesday as President Donald Trump prepares to nominate a new Fed chair who will be under intense pressure to cut interest rates, and in the run-up to a finely balanced December policy decision where the Fed’s Open Market Committee is likely to be split.