FACTBOX-Brokerages stick to slower pace of Fed rate cut forecasts ahead of payrolls data
Updates throughout; adds Morgan Stanley forecast
Feb 7 (Reuters) - Most brokerages continue to expect a slower pace of interest rate cuts from the U.S. Federal Reserve in 2025 ahead of a non-farm payrolls (NFP) report due today amid uncertainty from President Donald Trump's tariff policy.
President Trump's tariff policy is expected to drive up inflation and will increase pressure on the U.S. central bank as it looks to control persistent inflationary pressures.
The Federal Reserve left its benchmark overnight interest rate in the 4.25%-4.50% range in its January policy meeting and Federal Reserve Chair Jerome Powell said there would be no rush to cut them again until inflation and jobs data made it appropriate.
Here are the forecasts from major brokerages in 2025:
Rate cut estimates (in bps) | |||||
Brokerages | Mar 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 | 25 (in June) | 1 | 4.00-4.25% (in 2025) | |
Deutsche Bank | No rate cut | No rate cut | 0 | 4.25-4.50% (end of 2025) | |
ING | No rate cut | 50 (H2 2025) | 2 | 3.75-4.00% (end of 2025) | |
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 | No rate cut | 0 | - | |
HSBC | No rate cut | 75 (starting in June) | 3 | 3.50%-3.75% (end of 2025) | |
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
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