Senior strategist Robson at BNP Paribas forecasts that persistent inflation will limit the duration of the current monetary policy easing cycle, despite expectations for rate cuts in 2026. The outlook underscores a cautious approach to monetary normalization.
- Core inflation remains at 3.8% year-over-year, above target thresholds in key markets
- BNP Paribas anticipates only two rate cuts in 2026 before policy stabilization
- Robson warns that disinflation trends are too fragile to justify deeper or longer cuts
- The US Federal Reserve and European Central Bank faces upward pressure from wage growth and services inflation
- Fixed-income markets have priced in four expected cuts by Q4 2026, conflicting with Robson's assessment
- Central banks may delay full dovish pivot until inflation confirms sustained downward trajectory
BNP Paribas senior strategist Robson has issued a caution against assuming an extended period of interest rate reductions, citing elevated inflation metrics as a key constraint. Speaking ahead of the December 2025 economic calendar, Robson emphasized that core inflation remains above central bank targets in multiple major economies, with measures consistently tracking at 3.8% on a year-over-year basis. This level, he noted, is incompatible with prolonged easing beyond two consecutive cuts.