FACTBOX-Top brokerages eye Fed rate cut ahead of key policy meeting
September 15 (Reuters) -
Most major brokerages are now anticipating a rate cut of 25 basis points at the U.S. Federal Reserve's September meeting this week, with Standard Chartered's forecast of a 50 bp rate cut being the only exception.
August's labor data
pointed
to a significant cooling in job growth and a rise in unemployment to 4.3%, while inflation pressures continued to moderate, prompting some analysts to suggest that market conditions give the Fed room to move more quickly toward a neutral policy stance.
Traders are now pricing in a 94.2% chance of a 25 bp cut at the Federal Open Market Committee meeting on September 16 and 17, and a 5.8% chance of a 50 bp cut, according to the CME FedWatch Tool.
Adding to the chorus of dovish expectations, Morgan Stanley and Deutsche Bank now anticipate 75 bp rate cut by year-end.
Here are the forecasts from major brokerages for 2025:
Brokerage | Total cuts in 2025 | No. of cuts in 2025 | Fed Funds Rate (end of 2025) |
Citigroup | 75 bps | 3 (starting in September) | 3.00-3.25% (March 2026) |
Wells Fargo | 75 bps | 3 (starting in September) | 3.50-3.75% |
Goldman Sachs | 75 bps | 3 (Starting in September) | 3.50-3.75% |
Macquarie | 50 bps | 2 (in September and October) | 3.75-4.00% |
J.P.Morgan | 75 bps | 3 (Starting in September) | 3.50-3.75% |
Barclays | 75 bps | 3 (Starting in September) | 3.50-3.75% |
Nomura | 50 bps | 2 (in September and December) | 3.75-4.00% |
Morgan Stanley | 75 bps | 3 (starting in September) | 3.50-3.75% |
Deutsche Bank | 75 bps | 3 (starting in September) | 3.50-3.75% |
BofA Global Research | 50 bps | 2 (in September and December) | 3.75-4.00% |
UBS Global Research | 100 bps | Starting in September | 3.25-3.50% |
BNP Paribas | 50 bps | 2 (in September and December) | 3.75-4.00% |
HSBC | 50 bps | 2 (in September and December) | 3.75-4.00% |
UBS Global Wealth Management | 100 bps(by H1 2026) | Starting in September | 3.25-3.50% (End of H1 2026) |
Standard Chartered | 50 bps | September | 3.75-4.00% |
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
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