Danske Bank delays expectations of a US Fed rate cut as economic recession risks ease.

Analysts at Danske Bank Research Center stated in a report that due to the easing of the recent economic downturn risks driven by tariffs, the institution has postponed its forecast for a rate cut by the Federal Reserve. Danske Bank now predicts the next rate cut by the Fed will be in September, a quarter later than previously forecasted for June. However, they maintain their forecast for the terminal interest rate at 3.00%-3.25%. With the Fed now starting to cut rates once every quarter, the terminal rate is now projected to be reached in September 2026. A loose financial environment, lower tariffs, and better-than-expected macroeconomic data in April have reduced the immediate need for a rate cut. However, looking ahead, the slowdown in structural growth and sluggish credit growth still suggest further rate cuts in the future.