TD Securities: The normalization of Federal Reserve policy will be a key driver of global interest rates next year

According to Jin Ten, the interest rate strategist at TD Securities stated in a report that as we enter 2026, the normalization of the Federal Reserve's policy will become a key driver in the global interest rate arena.

The strategist pointed out that the market's expectations for the Federal Reserve's long-term rates remain "stubbornly" high, but as the Federal Reserve continues to push forward in the rate-cutting cycle, the market will eventually lower its expectations for the long-term federal funds rate. Given that the correlation between global rates and U.S. rates remains "very strong," the decline in U.S. yields will help curb the rise in long-term borrowing costs in other regions.