Mark Zandi’s Bold Call: Three Fed Rate Cuts Before June as Job Market Shows Cracks

Get ready for a policy pivot. The Federal Reserve is gearing up for a dramatic shift—and it's coming sooner than most Wall Street analysts predicted.

The Rate Cut Countdown Begins

Moody's Analytics chief economist Mark Zandi just fired a shot across the bow of conventional market wisdom. He's forecasting not one, not two, but three consecutive interest rate cuts from the Fed, all landing before summer hits. That's a full-blown easing cycle compressed into a single quarter.

What's forcing the Fed's hand? Look no further than the labor market. The once-red-hot job engine is finally sputtering. Cooling hiring numbers and rising unemployment claims are flashing warning signs the central bank can't ignore. They're trading their inflation-fighting playbook for an economic lifeline.

For crypto, this isn't just background noise—it's rocket fuel. Lower rates trash the appeal of traditional safe-haven assets. Suddenly, holding cash feels like a losing bet. Savvy capital starts hunting for higher returns, and digital assets sit squarely in the crosshairs. Expect a liquidity surge searching for the next big asymmetric bet.

The cynical take? Wall Street's 'soft landing' narrative always needed a hero. Enter the Fed with its magic rate-cut wand—just in time to prop up asset prices before election season gets into full swing. Some things never change.

Buckle up. The era of cheap money is making a thunderous comeback.

Unemployment rise and weak hiring pace trigger early cuts

According to Mark, businesses are dragging their feet on hiring, which means job growth will stay soft.That keeps unemployment climbing, and that puts pressure on the Fed.

“Until then, job growth will remain insufficient to forestall further increases in unemployment, and as long as unemployment is on the rise, the Fed will cut rates,” he wrote.

This view is far ahead of market expectations, which are only pricing in two cuts, one possibly in April, the second likely around September. That’s according to CME FedWatch data, which tracks rate predictions from futures traders. Mark isn’t buying that timeline. He sees rate cuts coming much earlier and more frequently.

Fed officials themselves are even more cautious. Their latest DOT plot, the grid of where each policymaker sees rates heading, only shows one rate cut for all of 2026. And even that one wasn’t a strong consensus.

December’s FOMC minutes revealed that the cut was a close call. Members admitted they might ease more later, but not by much. That’s not fast enough for Mark, who sees too many warning signs flashing red.

Trump’s control of Fed appointments adds more pressure

One reason Mark sees urgency is politics. President Donald Trump, back in the WHITE House, is already reshaping the Federal Reserve’s leadership.

Right now, three of the seven sitting Fed governors (Christopher Waller, Michelle Bowman, and Stephen Miran) are TRUMP appointees. With Miran’s term ending in January, Trump will soon get to pick another.

It doesn’t stop there. Jerome Powell’s time as Fed chair ends in May, even though his governor term runs through 2028. Trump is likely to pick someone who shares his low-rate agenda. He’s also reportedly trying to oust Governor Lisa Cook, although courts are blocking that attempt, for now.

Mark warns that this lineup gives Trump major influence. “Trump will also pressure for lower interest rates. Federal Reserve independence will steadily erode as the president appoints more members to the Federal Open Market Committee, including the Fed chair in May,” he said.

With midterm elections coming, the push for lower rates could get louder. Trump wants to show economic growth, and that means more pressure on the Fed. The next FOMC meeting is set for Jan. 27–28, but traders only see a 13.8% chance of a cut then, based on CME data. That may change fast if Mark is right.

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.