U.S. stocks may be in for rude awakening as rate cuts might not arrive until 2026, new Fed paper finds

A team of Federal Reserve economists have a troubling message for markets: interest rates could be kept above 5% for much longer than investors are anticipating. Perhaps until 2026.

That is the conclusion of a paper published late last week by Johannes Matschke and Sai Sattiraju, two economists with the Kansas City Federal Reserve Bank. The paper caught the attention of Apollo Global Management Chief Economist Torsten Slok, who mentioned it in a note to clients shared with MarketWatch on Monday.

“The…