FACTBOX-Major brokerages see slower pace of Fed rate cuts despite Trump tariff uncertainty
March 21 (Reuters) - Major brokerages maintained their predictions for a slower pace of interest-rate cuts by the U.S. Federal Reserve after the central bank kept its benchmark interest rate unchanged on Wednesday.
The Fed left its benchmark overnight interest rate in the 4.25%-4.50% range, with Chair Jerome Powell describing the current uncertainty as "unusually elevated," citing challenges in making new economic projections due to recent Trump administration policy changes.
The Fed also forecast slower economic growth and higher inflation.
Currently, traders expect two rate cuts of 25 basis points each for the year, according to data compiled by LSEG. The Federal Open Market Committee (FOMC) is scheduled to meet again on May 6-7.
Here are the forecasts from major brokerages following the March meeting:
Brokerage | Total cuts in 2025 | No. of cuts in 2025 | Fed Funds Rate |
Deutsche Bank | No rate cut | 0 | 4.25-4.50% (end of 2025) |
Morgan Stanley | 25 bps | 1 (25 bps in June) | 4.00-4.25% (in 2025) |
Goldman Sachs | 50 bps | 2 (25 bps each in June and December) | 3.75-4.00% (through December) |
J.P.Morgan | 50 bps | 2 (25 bps each in June and September) | 3.75-4.00% (through September 2025) |
Citigroup | 125bp | 5 (starting in May) | 3.00-3.25% (end of 2025) |
Barclays | 50 bps | 2 (25 bps each in June and September) | 3.75-4.00% (through September) |
Berenberg | No rate cut | 0 | 4.25-4.50% (end of 2025) |
Nomura | No rate cut | 0 | 4.25-4.50% (end of 2025) |
HSBC | 75 bps | 3 (25 bps each in June, September and December) | 3.50-3.75% (end of 2025) |
ING | 50 bps | 2 (H2 2025) | 3.75-4.00% (end of 2025) |
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