According to major brokerages, the U.S. Federal Reserve is expected to lower interest rates by a total of 50 basis points across its November and December meetings. This comes after an initial 50 bps reduction earlier this month, which Fed Chair Jerome Powell described as a "recalibration" due to a sharp decline in inflation since last year.
Powell emphasized that while the economy remains strong, the central bank wants to proactively address any potential weakening in the job market. Here are the rate cut estimates from major brokerages:
- BofA Global Research: 125 bps by end of 2025
- UBS Global Wealth Management: 50 bps in November, 100 bps in December, with a Fed Funds Rate of 3.25%-3.50% by end of 2025
- Deutsche Bank: 25 bps in November, 25 bps in December, 125 bps by end of 2025
- Barclays: 25 bps in November, 25 bps in December, 75 bps by end of 2025
- Morgan Stanley: 25 bps in November, 25 bps in December, 100 bps by June 2025
- Macquarie: 25 bps in November, 25 bps in December, 100 bps by June 2025
- Goldman Sachs: 25 bps in November, 25 bps in December, 100 bps by June 2025
- Citigroup: 50 bps in November, 25 bps in December
- J.P. Morgan: 50 bps in November, 25 bps in December
- HSBC: 100 bps in November, 25 bps in December, with a target rate of 3.25%-3.50% by June 2025
Before the Fed's decision, major brokerages had the following rate cut estimates:
- Goldman Sachs: 25 bps in September, 25 bps in November, 25 bps in December
- BofA Global Research: 25 bps in September, 25 bps in November, 25 bps in December
- UBS Global Wealth Management: 50 bps in September, 25 bps in November, 25 bps in December
- J.P. Morgan: 50 bps in September, 50 bps in November, 25 bps in December
- Wells Fargo: 50 bps in September, 50 bps in November, 25 bps in December
- Nomura: 25 bps in September, 25 bps in November, 25 bps in December
- Deutsche Bank: 25 bps in September, 25 bps in November, 25 bps in December
- Morgan Stanley: 25 bps in September, 25 bps in November, 25 bps in December
- Citigroup: 25 bps in September, 50 bps in November, 50 bps in December
- Wells Fargo Investment Institute: 50 bps in September, 25 bps in November, 25 bps in December
- Barclays: 25 bps in September, 25 bps in November, 25 bps in December
- UBS Global Research: 25 bps in September, 25 bps in November, 25 bps in December
- HSBC: 25 bps in September, 25 bps in November, 25 bps in December
- Macquarie: 25 bps in September, 25 bps in November, 25 bps in December
For a simple breakdown: The U.S. Federal Reserve is expected to cut interest rates by 50 basis points in total across its November and December meetings, with major brokerages making predictions on the extent of these cuts. This could impact various financial instruments and markets, so it's important for investors to stay informed and adjust their strategies accordingly.