BlackRock strategists Amanda Lynam and Dominique Bly expect only limited Federal Reserve interest rate cuts in 2026 unless there is a sharp deterioration in the US labor market. Despite the unemployment rate rising slightly to 4.6%, the increase is attributed to higher labor force participation and job losses from government sectors rather than fundamental labor market weakness. With recent policy easing of 175 basis points since September 2024, BlackRock anticipates the Fed's room to cut rates further is constrained unless employment conditions worsen substantially.