(Reuters) -Most brokerages continue to expect a slower pace of interest rate cuts from the U.S. Federal Reserve in 2025, with a majority pointing to a pause in rate cut at its policy meeting due later on Wednesday.
Recent economic data, including the jobs report and a rise in consumer price index, have dampened bets for a higher number of cuts in the first of half of this year. The Fed had eased interest rates by 100 basis points (bps) last year.
Market participants are betting on at least two rate cuts by the end of this year, as per data compiled by LSEG.
After cutting rates by a quarter of a percentage point at the Dec. 17-18 meeting, Fed Chair Jerome Powell said policymakers could now be “cautious” about further reductions.
Here are the forecasts from major brokerages before the Fed’s policy decision:
Rate cut estimates (in bps)
Brokerages Jan 2025 2025 No. of cuts Fed Funds Rate
in 2025
BofA Global No rate cut No rate cut 0 4.25-4.50%(end of
Research December)
Barclays No rate cut 25 (in June) 1 4.00-4.25% (end of
2025)
BNP Paribas No rate cut No rate cut 0 4.25-4.50%(end of
December)
Goldman Sachs No rate cut 50 (June and 2 3.75-4.00% (through
December) December)
J.P.Morgan No rate cut 50(June and – 3.75-4.00% (through
September) September 2025)
Morgan Stanley No rate cut 50 (through 2 3.75-4.00% (through
June 2025) June 2025)
Deutsche Bank No rate cut No rate cut 0 4.25-4.50% (end of
2025)
ING No rate cut 75 3 3.50-3.75%
UBS Global No rate cut 50 – 3.75-4.00% (end of
Wealth 2025)
Management
Citigroup No rate cut 125 (starting 5 3.00-3.25% (end of
in May) 2025)
Macquarie No rate cut 25 1 4.00-4.25%
Berenberg No rate cut No rate cut 0 4.25-4.50% (end of
2025)
Wells Fargo No rate cut 50 (September 2 3.75-4.00% (end of
and December) 2025)
Nomura No rate cut – 1 –
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
(Compiled by the Broker Research team in Bengaluru; Edited by Alden Bentley, Shinjini Ganguli, Maju Samuel, Devika Syamnath, Diane Craft, Anil D’Silva and Shounak Dasgupta)
