Interest Rate Forecasts by Major Brokerages
(Reuters) – Most brokerages forecast a 25 basis points interest rate reduction by the Federal Reserve in September, while J.P. Morgan, Citigroup, and Wells Fargo expect a 50 bps rate cut next month.
The U.S. unemployment rate jumped to a near three-year high of 4.3% in July, which stoked fears of a recession earlier in August. However, last week’s soft jobless claims report and an increase in retail sales in July have allayed those concerns.
Nearly all brokerages now expect the Fed to cut rates in all three remaining meetings of the year, a view echoed by 55 of 101 economists polled by Reuters.
New Rate Cut Estimates (in bps)
| Brokerage | Sept | Nov | Dec |
|---|---|---|---|
| Goldman Sachs | 25 | 25 | 25 |
| BofA Global Research | 25 | — | 25 |
| UBS Global Wealth Management | 50 | 25 | 25 |
| J.P. Morgan | 50 | 50 | 25 |
| Wells Fargo | 50 | 50 | 25 |
| Nomura | 25 | 25 | 25 |
| Deutsche Bank | 25 | 25 | 25 |
| Morgan Stanley | 25 | 25 | 25 |
| Citigroup | 50 | 50 | 25 |
| TD Securities | 25 | 25 | 25 |
| Peel Hunt | 25 | 25 | 25 |
| Barclays | 25 | 25 | 25 |
| UBS Global Research | 25 | 25 | 25 |
- Wells Fargo Investment Institute is a wholly owned subsidiary of Wells Fargo Bank
** UBS Global Research and UBS Global Wealth Management are distinct, independent divisions of UBS Group
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