The Fed will be forced into deep rate cuts in 2026 - boosting gold and breaking the dollar | Metals Mine

  • The Fed will be forced into deep rate cuts in 2026 - boosting gold and breaking the dollar

    From morningstar.com

    Slowing growth, weakening employment and contained inflation already argue for easier central bank policy. The U.S. Federal Reserve will likely cut rates more this year than both central bankers and financial markets expect. This is largely because the U.S. labor market continues to deteriorate. While job openings appeared to stabilize in October, quits have fallen, pointing to ongoing loosening. Wage growth tells the same story. The November employment report reinforced this view. Job growth was positive, but gains were concentrated in education and health services. More cyclical sectors showed minimal growth. ... (full story)

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The Fool
Jan 6, 2026 11:41am
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AI Overview
The U.S. Treasury will issue substantial amounts of new debt in 2026, needing roughly $1.7 trillion for the deficit plus around $9.2 trillion to refinance maturing debt, totaling nearly $11 trillion in gross issuance, driven by projected deficits and significant debt rollovers, with projections suggesting the national debt could hit $39 trillion by year-end.

Key Figures & Projections for 2026
Projected Deficit (FY2026): The Congressional Budget Office (CBO) forecasts a $1.7 trillion deficit for Fiscal Year 2026.

Total Borrowing: The Treasury needs cash for the deficit plus to replace maturing debt, potentially leading to nearly $11 trillion in total gross borrowing.

Maturing Debt: A significant portion of existing debt matures in 2026, requiring substantial refinancing.

National Debt: Forecasts suggest the U.S. national debt could reach approximately $39 trillion by the end of 2026.

Factors Influencing Issuance
Fiscal Policy: The Fiscal Responsibility Act (FRA) of 2023 sets spending caps, but deficits are still projected to grow, necessitating borrowing.

Interest Costs: Interest payments on the national debt are expected to exceed $1 trillion in 2026, adding to government outlays.
Market Conditions: Treasury's borrowing plans adjust based on market demand, but significant issuance is anticipated to fund operations.

Where to Find Official Data
For the most current figures, check Treasury Department press releases on borrowing estimates (e.g., the November 2025 announcement for the Jan-Mar 2026 quarter).
The Fool
Jan 6, 2026 11:58am
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$11 trillion in new issuance projected for 2026. Even during the extreme spending after the pandemic, debt issuance was not as high. Total debt outstanding from 2/2020 to 2/2022 increased by $7 trillion ($23 to $30 trillion).

https://fiscaldata.treasury.gov/data...t-to-the-penny
Fx-javi
Jan 6, 2026 4:06am
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There's no reason why, according to Powell, interest rates will only rise if the economic indicators suggest it. However, Wall Street is hoping for a rate cut so they can raise rates.
Reply
thebigshot
Jan 6, 2026 3:42am
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And the misconception people thought that the rate cut will be bullish.
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objective
Jan 6, 2026 11:26am
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100%
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Awaisqar
Jan 6, 2026 1:35am
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Is it possible
Reply
Kerelle
Jan 6, 2026 9:09am
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Lower interest rates will lead to an increase in cryptocurrencies and gold.
Reply

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