FACTBOX-Major brokerages reiterate slower pace of Fed rate cuts after CPI data
Updates throughout
Feb 14 (Reuters) - Most brokerages reiterated their predictions for a slower pace of interest-rate cuts from the Federal Reserve in 2025, after data showed U.S. inflation rose more than expected in January and uncertainty fueled by President Donald Trump's tariff announcements.
The U.S. consumer price index jumped 0.5% last month after gaining 0.4% in December, while economists polled by Reuters had forecast a 0.3% rise.
President Trump's tariff policy is expected to drive up inflation and increase pressure on the U.S. central bank as it looks to control persistently high prices.
Traders are fully pricing in at least one 25-basis-point interest rate cut by the end of the year, with an over 33% chance of an additional such reduction, as per data compiled by LSEG.
The Fed left its benchmark overnight interest rate in the 4.25%-4.50% range in its January policy meeting and 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 brokerages after CPI data on Wednesday:
| 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) | |
Here are the forecasts from major brokerages before CPI data:
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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