FACTBOX-Wall Street brokerages pencil in mid‑2026 Fed rate cuts

ReutersJan 12, 2026 4:26 PM

Jan 12 (Reuters) - Goldman Sachs, Barclays and Morgan Stanley postponed their U.S. interest rate forecasts to mid-2026, while J.P. Morgan withdrew its January rate cut call after data showed the jobs market was not rapidly deteriorating.

Data on Friday showed U.S. employment growth slowed more than expected in December. However, a decline in the unemployment rate to 4.4% and solid wage growth suggested the labor market was not rapidly deteriorating, boosting expectations that the central bank will leave interest rates unchanged at its January meeting.

Goldman Sachs , Barclays and Morgan Stanley expect the Fed to deliver the next cut in June, while J.P. Morgan predicts the central bank's next move to be a rate hike in late 2027.

Traders are betting on a 95% chance for the Fed to keep rates unchanged at its January 27-28 meeting, according to the CME FedWatch tool.

Here are the forecasts from major brokerages for 2026:

Brokerage	Total cuts in 2026	No. of cuts in 2026	Fed Funds Rate
Citigroup	75 bps	3 (in March, July and September)	2.75-3.00%
Goldman Sachs	50 bps	2 (in June and September)	3.00-3.25%
Morgan Stanley	50 bps	2 (in June and September)	3.00-3.25%
BofA Global Research	50 bps	2 (in June and July)	3.00-3.25%
Wells Fargo	50 bps	2 (in March and June)	3.00-3.25%
Nomura	50 bps	2 (in June and September)	3.00-3.25%
Barclays	50 bps	2 (in June and December)	3.00-3.25%
UBS Global Research	50 bps	2 (July and October)	3.00-3.25%
HSBC	No rate cuts	-	3.50-3.75%
J.P. Morgan	No rate cuts	-	3.50-3.75%
Macquarie	Rate hike	in Q4	-

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