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

ReutersJan 14, 2026 9:14 AM

Jan 14 (Reuters) - Goldman Sachs, Barclays and Morgan Stanley now expect the U.S. Federal Reserve to deliver its next interest rate cut in June after data showed the jobs market was not rapidly deteriorating, while J.P.Morgan sees the next move as a hike in 2027.

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 boosted expectations that the central bank will leave interest rates unchanged at its January meeting.

Separately, an inflation reading on Tuesday came in-line with expectations, leaving market expectations for Fed rate cuts this year largely unchanged.

Traders are betting on a 97.2% 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	-
UBS Global Wealth Management	25 bps	in Q1	-
Standard Chartered	No rate cuts	-	3.50-3.75%
Deutsche Bank	25 bps	1 (in September)	3.25-3.50%

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.