FACTBOX-Most global brokerages expect two more Fed rate cuts in 2026
Jan 5 (Reuters) - Most top global brokerages predict two rate cuts by the U.S. Federal Reserve, totaling 50 basis points, in 2026, but have varied expectations regarding the timing, given the central bank's caution about pausing in the near term.
In its December meeting, a sharply divided Fed trimmed policy rates by 25 basis points but hinted borrowing costs will stay put for now as it tries to gauge the health of the labor market, and seeks more data on inflation and economic performance.
Here are the forecasts from major brokerages for 2026:
Brokerage | Total cuts in 2026 | No. of cuts in 2026 | Fed Funds Rate |
J.P.Morgan | 25 bps | in January | 3.25-3.50% |
Citigroup | 75 bps | 3 (in January March and September) | 2.75-3.00% |
Goldman Sachs | 50 bps | 2 (in March and June) | 3-3.25% |
Morgan Stanley | 50 bps | 2 (in January and April) | 3-3.25% |
BofA Global Research | 50 bps | 2 (in June and July) | 3-3.25% |
Wells Fargo | 50 bps | 2 (in March and June) | 3-3.25% |
Nomura | 50 bps | 2 (in June and September) | 3-3.25% |
Barclays | 50 bps | 2 (in March and June) | 3-3.25% |
Deutsche Bank | 25 bps | 1 (in September) | 3.25-3.50% |
HSBC | No rate cuts | - | 3.50-3.75% |
Standard Chartered | No rate cuts | - | 3.50-3.75% |
Macquarie | Rate hike | in Q4'26 | - |
UBS Global Research | 50 bps | 2 (July and October) | 3-3.25% |
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