Wells Fargo still sees two Fed rate cuts in 2026 despite recent hot inflation reports

Wells Fargo maintains its forecast for two Federal Reserve interest rate cuts in 2026, despite recent inflation data exceeding expectations. The bank cites elevated inflation due to geopolitical tensions as a reason for the Fed's cautious approach. While inflationary pressures are present, Wells Fargo believes underlying labor market weaknesses will lead to policy support later this year, projecting two 25-basis-point cuts at the Fed's October and December meetings.