FACTBOX-Brokerages expect Fed to pause its rate-cut cycle in first policy meeting of 2025
Updates throughout
Jan 29 (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 in 2025 | Fed Funds Rate | |
BofA Global Research | No rate cut | No rate cut | 0 | 4.25-4.50%(end of 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 December) | 2 | 3.75-4.00% (through December) | |
J.P.Morgan | No rate cut | 50(June and September) | - | 3.75-4.00% (through September 2025) | |
Morgan Stanley | No rate cut | 50 (through June 2025) | 2 | 3.75-4.00% (through 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 Wealth Management | No rate cut | 50 | - | 3.75-4.00% (end of 2025) | |
Citigroup | No rate cut | 125 (starting in May) | 5 | 3.00-3.25% (end of 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 and December) | 2 | 3.75-4.00% (end of 2025) | |
Nomura | No rate cut | - | 1 | - | |
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
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