U.S. Federal Reserve Cuts Interest Rates
(Reuters) – The U.S. Federal Reserve cut interest rates by an oversized 50 basis points in its Sept. 17-18 meeting that Chair Jerome Powell said was meant to show policymakers' commitment to sustaining a low unemployment rate now that inflation had eased.
Fed policymakers also projected the benchmark interest rate would fall by another half percentage point by the end of this year, a full percentage point next year, and half a percentage point in 2026, though they cautioned that the outlook that far into the future was inherently uncertain.
Economic Forecasts
Following are forecasts from some major banks on economic growth, inflation, and how they expect certain asset classes to perform:
Forecasts for Stocks, Currencies and Bonds
| Entity | S&P 500 | US 10-year | EUR/USD | USD/JPY | USD/CNY Target Yield |
|---|---|---|---|---|---|
| Goldman Sachs | 6,000 | 3.85% | 1.08 | 150 | 7.20 |
| Morgan Stanley | 5,400 | 3.85% | 1.09 | 148 | 7.20 |
| UBS Global | 5,200 | 3.85% | 1.09 | 140 | 7.20 |
| Wells Fargo | 6,200-6,400 | 3.75%-4.25% | 1.06-1.10 | 156-160 | – |
| Barclays | 5,600 | 4.25% | 1.09 | 145 | 7.20 |
| J.P. Morgan | 4,200 | 3.55% | 1.13 | 146 | 7.25 |
| BofA Global Research | 5,400 | 3.50% | 1.12 | 151 | 7.30 |
| Deutsche Bank | 5,750 | 3.80% | 1.07 | 135 | – |
| Citigroup | 5,600 | 4.20% | 1.08 | 141 | 7.20 |
| HSBC | 5,900 | 3.00% | 1.05 | 145 | 7.10 |
| Oppenheimer | 5,900 | – | – | – | – |
| UBS Global Research | 5,850 | 4.0% | 1.12 | 145 | 6.95 |
| Evercore ISI | 6,000 | – | – | – | – |
| RBC | 5,700 | – | – | – | – |
U.S. Inflation
U.S. consumer prices rose slightly more than expected in September, but the annual increase in inflation was the smallest in more than 3-1/2 years, potentially keeping the Federal Reserve on track to cut interest rates again in November.
| Forecast for U.S. Inflation (Annual Y/Y for 2024) | Headline CPI | Core PCE |
|---|---|---|
| Goldman Sachs | 2.6% | 2.6% |
| Morgan Stanley | 2.10% | 2.70% |
| Wells Fargo Investment Institute | 3.0% | 2.60% |
| Barclays | 2.9% | 2.6% |
| J.P. Morgan | 2.50% | 2.50% |
| BofA Global Research | 3.5% | 2.8% |
| Deutsche Bank | 3.10% | – |
| Citigroup | 2.0% | 2.7% |
| HSBC | 3.4% | – |
Real GDP Growth Forecasts for 2024
| Global Area | Goldman Sachs | Morgan Stanley | UBS Global Wealth Management | Barclays | J.P. Morgan | BofA Global Research | Deutsche Bank | Citigroup | HSBC |
|---|---|---|---|---|---|---|---|---|---|
| GLOBAL | 2.7% | 2.8% | 3.1% | 2.6% | 2.7% | 3.1% | 3.2% | 4.7% | 2.6% |
| U.S. | 2.8% | 1.9% | 2.4% | 1.2% | 2.8% | 2.7% | 2.7% | 0.7% | 2.3% |
| CHINA | 4.9% | 4.2% | 4.9% | 5.0% | 4.8% | 4.8% | 4.7% | 1.0% | 4.9% |
| EURO | 0.7% | 0.5% | 0.6% | 0.3% | 0.7% | 0.7% | 0.9% | – | 0.5% |
| UK | 0.9% | -0.1% | 0.2% | 1.1% | 0.9% | 1.1% | 1.2% | – | 0.4% |
| INDIA | 6.7% | 6.4% | 7.0% | 6.2% | 6.5% | 7.1% | 7.0% | 7.1% | 6.3% |
- UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group.
Comments (0)