FACTBOX-Wall Street brokerages stick to two Fed rate cuts in 2026
March 30 (Reuters) - Major brokerages are still forecasting two U.S. Federal Reserve interest-rate cuts in 2026 in contrast to the central bank's latest projections, which signaled a single quarter-point reduction amid renewed inflation concerns fueled by the Middle East war.
Nomura joined peers Goldman Sachs and Barclays to expect the first rate reduction in September, compared with June previously.
The Fed left rates unchanged at its meeting in March, as expected. Investors focused on a cautious tone by Chair Jerome Powell - that the economic outlook remains uncertain amid the Iran war.
Money market participants are no longer pricing in any easing from the U.S. central bank this year, compared to two rate cuts before the conflict erupted, according to the CME Group's 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 June, July and September) | 2.75%-3.00% |
Goldman Sachs | 50 bps | 2 (in September and December) | 3.00%-3.25% |
Morgan Stanley | 50 bps | 2 (in September and December) | 3.00%-3.25% |
BofA Global Research | 50 bps | 2 (in June and July) | 3.00%-3.25% |
Wells Fargo | 50 bps | 2 (in June and September) | 3.00-3.25% |
Nomura | 50 bps | 2 (September and December) | 3.00-3.25% |
Barclays | 25 bps | 1 (in September) | 3.25%-3.50% |
UBS Global Research | 50 bps | 2 (July and October) | 3.00%-3.25% |
UBS Global Wealth Management | 50 bps | 2 (September and December) | 3.00%-3.25% |
Deutsche Bank | 25 bps | 1 (in September) | 3.25%-3.50% |
BNP Paribas | No rate cuts | - | 3.50%-3.75% |
HSBC | No rate cuts | - | 3.50%-3.75% |
J.P.Morgan | No rate cuts | - | 3.50%-3.75% |
Standard Chartered | No rate cuts | - | 3.50%-3.75% |
Macquarie | Rate hike (in H1 2027) | - | - |
