U.S. Federal Reserve Interest Rate Cut Expectations
(Reuters) – Brokerages, including Morgan Stanley (NYSE:MS), are reiterating their expectation of a 25-basis-point interest rate cut by the U.S. Federal Reserve in December, following the nonfarm payrolls data.
Data showed nonfarm payrolls increased by 227,000 jobs last month after rising an upwardly revised 36,000 in October. Economists polled by Reuters had forecast payrolls accelerating by 200,000 jobs last month following a previously reported 12,000 rise in October.
U.S. job growth surged in November after being severely constrained by hurricanes and strikes, but a rise in the unemployment rate to 4.2% pointed to an easing labor market that should allow the U.S. Federal Reserve to cut interest rates again this month.
The Fed's next monetary policy meeting is due on December 17-18.
Rate-Cut Estimates by Major Brokerages After NFP Data
| Brokerage | Dec 2024 |
|---|---|
| Morgan Stanley | 25 |
| Macquarie | 25 |
| ING | 25 |
| Wells Fargo (NYSE:WFC) | 25 |
Rate Cut Estimates by Major Brokerages Before NFP Data
| Brokerage | Dec 2024 | 2025 | Fed Funds Rate |
|---|---|---|---|
| BofA Global | 25 | 50 | 3.75%-4.00% (end of June) |
| Barclays (LON:BARC) | 25 | 50 | 3.75%-4.00% (end of 2025) |
| Macquarie | 25 | 100 | 3.25%-3.50% (through June 2025) |
| Goldman Sachs | 25 | 100 | 3.25%-3.50% (through September 2025) |
| J.P.Morgan | 25 | 75 | 3.75% (through September 2025) |
| UBS Global | 25 | 125 | 3.00%-3.25% (through end of 2025) |
| TD Securities | 25 | 100 | 3.25%-3.50% (through end of 2025) |
| Morgan Stanley | 25 | 100 | 3.375% (Q4 2025) |
| Jefferies | 25 | 100 | 3.25%-3.50% (through end of 2025) |
| Nomura | – | 50 | 4.125% (through end of 2025) |
| Deutsche Bank (ETR:DBKGn) | 25 | No Rate Cuts | 4.375% |
| Citigroup (NYSE:C) | 50 | – | – |
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