Fed’s Interest Rate Reduction Expectations
(Reuters) – Most major brokerages anticipate that the U.S. Federal Reserve will lower interest rates by a total of 50 basis points during its November and December meetings. This follows an earlier decision to cut rates by 50 basis points earlier this month.
Fed Chair Jerome Powell described the cut as a “recalibration” in light of a significant decline in inflation since last year. He emphasized that while the economy remains robust, the central bank aims to preemptively address any potential weakening in the job market.
Forecasts from Major Brokerages After the Fed’s Decision
| Brokerage | Nov | Dec | 2025 Fed Funds Rate at End of 2025 |
|---|---|---|---|
| BofA | 125 | 50 | 2.75%-3.00% |
| UBS Global Wealth Management | 50 | 100 | 3.25%-3.50% |
| Deutsche Bank | 25 | 25 | 3.25%-3.50% (125 bps) |
| Barclays | 25 | 25 | 3.50%-3.75% |
| Morgan Stanley | 25 | 25 | 3.25%-3.50% (through June 2025) |
| Macquarie | 25 | 25 | 3.25%-3.50% (through June 2025) |
| Goldman Sachs | 25 | 25 | 3.25%-3.50% (through June 2025) |
| Citigroup | 50 | 25 | |
| J.P. Morgan | 50 | 25 | |
| HSBC | 100 | 25 | 3.25%-3.50% (through June 2025) |
Forecasts from Major Brokerages Ahead of the Fed’s Decision
| Brokerage | Sept | Nov | Dec |
|---|---|---|---|
| Goldman Sachs | 25 | 25 | 25 |
| BofA Global Research | 25 | 25 | 25 |
| UBS Global Wealth Management | 50 | 25 | 25 |
| J.P. Morgan | 50 | 50 | 25 |
| Wells Fargo | 50 | 50 | 25 |
| Nomura | 25 | 25 | 25 |
| Deutsche Bank | 25 | 25 | 25 |
| Morgan Stanley | 25 | 25 | 25 |
| Citigroup | 25 | 50 | 50 |
| Barclays | 25 | 25 | 25 |
| UBS Global Research | 25 | 25 | 25 |
| HSBC | 25 | 25 | 25 |
| Macquarie | 25 | 25 | 25 |
Note:
– UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group.
– Wells Fargo Investment Institute is a wholly-owned subsidiary of Wells Fargo Bank.
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