There is significant disagreement between the Federal Reserve and financial markets regarding the US interest rate forecast for 2026. While the Fed's median forecast only implies one rate cut, the market expects two to three cuts, with the probability of a rate cut in April at 81%. This disconnect stems from market expectations that President Trump will exert political pressure to implement easing policies, especially as Fed Chair Powell's term comes to an end. However, persistent inflation erodes Trump's political capital, complicating this dynamic and creating a paradox: conditions that are politically favorable for government cuts may also make such cuts economically unreasonable.