Major Brokerages’ Expectations for U.S. Interest Rates
(Reuters) – Major brokerages, including BofA and Goldman Sachs, expect the U.S. Federal Reserve to hold interest rates steady in the upcoming January meeting, following a quarter-percentage-point cut in December.
Fed Chair Jerome Powell indicated that further reductions in borrowing costs depend on progress in tackling persistently high inflation. His comments suggest that policymakers are beginning to contemplate the potential for significant economic changes under a possible Trump administration.
Rate Cut Estimates for 2025
Here are the forecasts from major brokerages for 2025 rate cuts (in basis points):
| Brokerages | Jan 2025 | 2025 Fed Funds Rate |
|---|---|---|
| BofA Global Research | No rate cut | 50 | 3.75%-4.00% (end of June) |
| Barclays (LON:BARC) | No rate cut | 50 | 3.75%-4.00% (end of 2025) |
| Goldman Sachs | No rate cut | 75 | 3.50%-3.75% (through September 2025) |
| J.P. Morgan | No rate cut | 75 | 3.75% (through September 2025) |
| Morgan Stanley (NYSE:MS) | No rate cut | 50 | 3.75%-4.00% (through June 2025) |
| Nomura | No rate cut | 25 | 4.00%-4.25% (through end of 2025) |
| UBS Global Research | No rate cut | 125 | 3.00%-3.25% (through end of 2025) |
| Deutsche Bank (ETR:DBKGn) | No rate cut | No Rate Cuts | 4.25%-4.50% |
| Societe Generale | No rate cut | – | 3.00%-3.25% (by early 2026) |
| ING | No rate cut | 75 | 3.75%-4.00% |
| Macquarie | No rate cut | 25 | 4.00%-4.25% |
| UBS Global Wealth Management | No rate cut | 50 | 3.75%-4.00% (end of 2025) |
| Peel Hunt | No rate cut | 50 | 3.50%-4.00% |
*Note: UBS Global Research and UBS Global Wealth Management are distinct, independent divisions within UBS Group.
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