Federal Reserve building at dawn with stone columns in dramatic shadow and currency exchange board in foreground

JP Morgan Says No Fed Cuts in 2026: What Expats Must Do With Cash and Pensions Now

Q: How does this change my pension transfer timing?

The JP Morgan forecast extends the 'wait for lower Gilt yields' timeline by approximately 12-18 months from prior market expectations. The question is whether the structural flexibility of a QROPS or SIPP is worth more than the marginal CETV uplift from waiting. Request a current CETV to make an informed decision.

Q: How does the FOMC statement on April 29 actually move currency markets?

Markets react to forward guidance language and dot plot projections. On April 29, no dot plot change is expected. Phrases like 'prepared to adjust policy in either direction' signal hawkish tilt vs 'committed to returning inflation to target.' Markets reprice USD within seconds of the 2:00 PM EST statement. For large currency conversions, executing before April 29 removes the noise.

April 26, 2026

The FOMC meets April 28–29 and will hold rates at 3.5–3.75%. That is already priced. What is not priced is the horizon shift underneath it: JP Morgan's research team now forecasts zero Fed rate cuts throughout 2026 and places a material probability on a 25 basis point hike in Q3 2027. The driver is not traditional economic overheating. It is tariff-induced inflation. Core goods prices rose 3.1% directly attributable to US tariffs. The average effective US tariff rate hit 11.8% — the highest since the early 1940s. For expats managing cash across multiple currencies, holding pension assets in GBP or EUR, or planning retirement income in the next five to ten years, the rate calendar just got materially longer.

Last updated: 26 April 2026

Key Takeaways

JP Morgan's revised forecast — zero Fed cuts in 2026, possible 25bps hike Q3 2027 — means the "rate relief" environment that many expats have been waiting for is now at least 18 months away, and may reverse entirely.
The Fed is holding because of tariff-induced supply-side inflation, not demand overheating: core goods CPI +3.1% from tariffs, average effective tariff rate 11.8% (highest since the 1940s).
USD staying strong for 18+ months affects every expat managing assets across currencies — MYR, GBP, and EUR holders all face a prolonged USD premium environment.
For expats with UK DB pensions, QROPS, or SIPPs, elevated Gilt yields maintained by the Bank of England's parallel hold mean lower pension transfer values and compressed real returns on GBP-duration assets.

What Did JP Morgan Actually Revise and Why Does It Matter?

JP Morgan's research team moved from forecasting one to two Fed cuts by end of 2026 to forecasting zero cuts in 2026 and a possible 25bps hike in Q3 2027 — a shift driven entirely by tariff-induced goods price inflation rather than overheating in labour or services markets.

The distinction matters for how expats should interpret this. When central banks hold rates because of overheating consumer demand, the eventual pivot is relatively predictable: demand cools, inflation falls, cuts follow. When central banks hold because of supply-side inflation driven by trade policy, the pivot point depends on political decisions in Washington rather than economic data. This is fundamentally harder to forecast.

The data behind JP Morgan's revision:

Core goods prices in the US rose 3.1% in Q1 2026 attributable to tariffs. This is separate from services inflation and separate from energy. It represents the direct pass-through of import costs to consumer prices across electronics, clothing, manufactured goods, and processed food. With the average effective US tariff rate now at 11.8% — the highest since Smoot-Hawley-era trade policy in the early 1940s — this goods price pressure is structural as long as tariffs remain in place.

The FOMC meets April 28–29. No rate action is expected. What to watch is Powell's language: specifically whether he characterises the next policy move as "still leaning toward eventual easing" or introduces language suggesting "the next move could be in either direction." The latter would be a meaningful signal shift, and currency markets will react to it within minutes of the statement release.

What Is the Difference Between Tariff Inflation and Demand Inflation for the Fed?

With demand inflation, the Fed raises rates to slow spending — which works. With tariff inflation, raising rates does not remove the price pressure; it simply adds borrowing cost pressure on top of goods price pressure, compressing growth without curing inflation. This is the stagflation trap that the UK has already entered and the US is trying to avoid. The Fed's problem is that it cannot fix a tariff with a rate hike, but it cannot cut rates while goods prices are rising. So it holds — indefinitely, until the trade policy changes.

What Does "Rates Higher for Longer" Mean for Expat Currency Positions?

USD staying strong at 3.5–3.75% Fed funds rate while the Bank of England runs a parallel hold creates a dual-rate environment where both GBP/USD and EUR/USD face structural constraints — but the expat living in MYR, SGD, or THB faces a different calculation depending on which currency their income and savings are in.

USD/MYR is currently at approximately 3.95. The mild USD strength bias in the brief reflects the ongoing Fed hold. Over the next 12–18 months, absent a Trump-Xi summit deal or a material de-escalation on tariffs, USD is likely to hold or strengthen modestly as the rate differential against EM currencies persists.

For expats earning in USD: purchasing power in Malaysia, Thailand, and Singapore is elevated at current rates. Your MYR-denominated costs are effectively discounted relative to your USD income. This is a temporary structural advantage that should be used — either to build savings at a higher rate, to remit efficiently, or to invest in locally priced assets while the conversion rate is favourable. It will not last indefinitely.

For expats earning in MYR, SGD, or THB: if you hold USD-denominated investments or are considering USD-priced assets, the current exchange rate represents higher entry cost than 18 months ago. Dollar-cost averaging into globally diversified positions — rather than a lump-sum conversion at the current rate — is more defensible in this environment.

For GBP earners: the Bank of England is running its own "hold" cycle, also driven by energy-related inflation. GBP/USD is therefore in a narrower range than it would be if the two central banks were diverging. GBP-earning expats do not get the full benefit of USD weakness when rates converge.

What About EUR-Earning Expats?

EUR/MYR at 4.65 with mild EUR softness reflects the European energy crunch from the Russian LNG ban activating this week. The ECB is also in a hold cycle, though with less tariff-specific pressure than the Fed. EUR earners face a similar holding pattern on rates but with additional downside from energy-driven inflation on the continent. See our recent piece on the EU Russian LNG ban and what it means for European expats' EUR assets for the specific EUR context.

How Does the Rate Extension Affect UK Pension and QROPS Holders?

Elevated UK Gilt yields — maintained by a Bank of England that cannot cut while energy inflation runs above target — directly compress defined benefit pension transfer values and reduce real returns on GBP-duration assets held in SIPPs and QROPS.

The transmission mechanism works like this: the Bank of England holds rates because UK inflation remains above target, driven by energy costs from the simultaneous Hormuz supply disruption and the EU Russian LNG ban. Elevated BoE rates keep Gilt yields elevated. Gilt yields are the discount rate used to calculate the present value of DB pension liabilities — and therefore the cash transfer value (CETV) a DB pension scheme offers to departing members.

In plain terms: the higher the Gilt yield, the lower the CETV. If you are a British expat weighing a DB pension transfer to a QROPS or SIPP, you are doing so at a moment when Gilt yields are elevated by energy-driven inflation that is structural rather than cyclical. CETVs are lower today than they would be at a 2% Gilt yield. If energy inflation eases and the BoE cuts, CETVs would increase.

This creates two legitimate positions:

Position A: Transfer now at a depressed CETV, on the basis that the structural flexibility of a QROPS (currency diversification, jurisdiction control, IHT planning) is worth more than the marginal CETV improvement from waiting.

Position B: Wait for a potential BoE pivot (12–24 months away at current forecasts) that improves the CETV calculation before transferring.

Neither position is universally correct — it depends on your age, health, other income sources, currency needs, and specific DB scheme terms. What is clear is that the JP Morgan forecast elongates the timeline for Position B. If you were waiting for "rates to come down" before reviewing your pension, that timeline now extends to Q4 2027 at the earliest. Our UK pension transfer to Malaysia guide covers the CETV calculation in full.

What About QROPS and SIPP Asset Allocation?

For expats already holding a QROPS or SIPP, the asset allocation question is separate from the transfer decision. A QROPS or SIPP invested primarily in UK Gilts or UK-focused equity funds is carrying concentrated GBP and UK economic risk. In a prolonged BoE hold environment with structural energy inflation, the real return on those assets is compressed. The case for diversifying within those wrappers — increasing allocation to Irish-domiciled accumulating UCITS with global coverage — is stronger today than it was 12 months ago.

Should Expats Be Holding More or Less Cash in This Environment?

The instinct to hold cash at 3.5–3.75% Fed funds rates is understandable, but the relevant return is not the nominal rate — it is the nominal rate minus inflation in your jurisdiction of residence. In most of Southeast Asia, that real return is close to zero or slightly negative.

Cash at elevated nominal rates looks attractive on paper. But consider the full picture:

If you hold cash in MYR, you are earning approximately 2.75–3.0% in Malaysian banking rates — below the Fed funds rate and below MYR inflation, which is running at approximately 2.5–3.0% with energy price pressures. Real return: near zero.

If you hold cash in SGD, you are earning approximately 3.0–3.5% in Singapore high-yield savings instruments. Attractive in nominal terms, but SGD CPI is running above target and the MAS recently tightened monetary policy. Real return: modest positive, but compressing.

If you hold cash in USD (at a US broker or international platform), you are earning 3.5–4.0% money market rates. This is the best real return scenario for expats at current rates — but it requires actively holding USD-denominated cash positions rather than letting funds idle in local bank accounts.

The opportunity cost argument: every quarter spent holding excess cash at near-zero real return is a quarter not invested in a globally diversified equity portfolio with long-run returns of 7–9% annually. Over a 10-year horizon, the compounding penalty of holding 12–18 months of "extra" cash at zero real return is material. The case for long-term compounding over short-term cash timing has not changed because the Fed is on hold.

For expats who have been waiting to invest because "rates might fall and prices might be cheaper," the JP Morgan forecast is a direct challenge to that logic. If rates stay elevated for 18+ months, the entry point you are waiting for may not arrive.

What Are the Practical Actions for Expats Before the FOMC Decision on April 28–29?

The FOMC announcement on April 29 will almost certainly be a hold. The actionable signal is Powell's language — specifically whether he opens the door to a hike or closes the door to near-term cuts more firmly. Here are three things worth doing before that statement.

First, review your cash allocation. How much of your total investable assets is sitting in cash — MYR savings accounts, short-term FDs, money market funds? If it exceeds 12 months of expenses plus a deliberate emergency reserve, the excess cash is earning you a real return close to zero while your investment horizon runs. Getting that excess deployed into broadly diversified positions before the April 29 statement removes the "I'll do it after I see the Fed" decision loop.

Second, if you hold a SIPP or QROPS with significant UK Gilt or UK equity weighting, check the asset allocation. In a prolonged BoE hold with energy-driven inflation, UK-focused assets are running into structural headwinds. Diversifying toward globally distributed Irish-domiciled UCITS reduces both the currency concentration and the UK economic concentration. This can typically be done within your existing QROPS or SIPP wrapper without a transfer.

Third, if you have been waiting to request a CETV on your UK DB pension, request it now. CETVs are typically valid for three months. Requesting one now gives you the data you need to make an informed decision — transfer or wait — without committing to anything. Given that the JP Morgan timeline for BoE easing now extends to late 2027, a decision to wait should be a deliberate choice backed by the numbers, not an assumption that something will improve soon. See also why waiting until your 50s is a million-dollar mistake for the compounding cost of delayed structural decisions.

For broader framework, our piece on how to diversify as a high-income expat who thinks they are already diversified covers the common concentration mistakes in this rate environment, and the expat's guide to capturing S&P 500 value during market uncertainty explains the deployment logic for cash sitting on the sidelines.

Frequently Asked Questions

Q: What is the difference between "no cuts" and a potential rate hike for expat planning?

A: No cuts means rates stay where they are — relatively predictable. A hike means rates go higher — which increases USD strength further, increases Gilt yields further (compressing UK pension transfer values more), and increases the real borrowing cost for any expat with USD-denominated debt or margin. The Q3 2027 hike scenario in JP Morgan's forecast is a tail risk, not a base case. But it is materially different from the widespread expectation six months ago that the Fed would be cutting by now.

Q: How does this change my pension transfer timing?

A: The JP Morgan forecast extends the "wait for lower Gilt yields" timeline by approximately 12–18 months from prior market expectations. If you were planning to review a CETV transfer decision in late 2026, that window has moved. The question is not only when rates will fall — it is whether the structural flexibility of a QROPS or SIPP is worth more than the marginal CETV uplift from waiting. That calculation is specific to your situation. The number to request first is a current CETV.

Q: Should I convert more of my savings into USD given the rate environment?

A: USD offers the best nominal return on cash at current rates among major currencies available to expats. But wholesale conversion from MYR or GBP into USD for a cash position creates currency risk on the way back — when you eventually convert USD back to the currency of your retirement location, you bear the exchange rate risk at that future date. A more structured approach is to hold USD-denominated investments in globally diversified vehicles (Irish-domiciled UCITS denominated in USD or EUR) rather than holding large USD cash balances that need to be converted.

Q: How does the FOMC statement on April 29 actually move currency markets?

A: Currency markets react primarily to two things in Fed statements: the forward guidance language and any change to the "dot plot" interest rate projections. On April 29, no change to the dot plot is expected. The statement language is the variable. Phrases like "prepared to adjust policy in either direction" signal a more hawkish tilt than "committed to returning inflation to target" without specifying direction. Markets will reprice USD within seconds of the 2:00 PM EST statement release, and press conference comments from Powell will add further volatility for 30–60 minutes afterward. For expats doing large currency conversions around this window, executing before April 29 removes the noise.

Q: What does tariff-induced inflation mean for the Fed's eventual pivot?

A: Tariff inflation is politically generated, not economically generated. The Fed can cool demand inflation by raising rates. It cannot remove tariff-driven price pressure by monetary policy alone. The implication: the Fed's pivot point is ultimately determined by US trade policy, not by economic data. A Trump-Xi deal that reduces tariff rates would be the single biggest near-term catalyst for Fed rate cuts — more than any jobs report or CPI print. This is why the May 14–15 summit matters for rate expectations as well as EM currencies.

Q: I earn in USD. How does higher-for-longer affect my Malaysian investments?

A: USD earners benefit from stronger purchasing power on MYR-denominated assets at the current exchange rate. But the relevant question is not just the current rate — it is the rate at the time you need to consume those Malaysian assets (retirement, property purchase, school fees). If you are accumulating MYR investments now at 3.95 USD/MYR, and MYR strengthens to 3.70 in three years when US-China trade stabilises and the Fed cuts, your USD has bought more MYR than it will be worth at exit. Dollar-cost averaging reduces but does not eliminate this timing risk.