Madison Investment expects Fed to hold rates steady through Q2 2026 as Treasury curve steepens

Madison Investment's head of fixed income said on Dec. 11 that the steepening US Treasury yield curve highlights monetary policy's limited market impact, Jin10 and BlockBeats report. Policy shifts significantly influence the curve's front end, while structural factors like above-target inflation and large fiscal deficits pressure the long end. Fed Chair Jerome Powell's comments on a softening labor market sparked bond buying that reversed a sell-off and steepened the curve. Madison Investment expects the Fed to slow additional easing and hold rates unchanged until Q2 2026.