Factbox-Major brokerages expect Fed to lower rates in September

2024.08.22 05:03

(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 the three remaining meetings of the year, a view echoed by 55 of 101 economists polled by Reuters.

Here are the forecasts from major brokerages after the July unemployment data:

New rate cut estimates (in bps) Old rate cut estimates (in bps)

Sept Nov Dec Sept Nov Dec

Goldman Sachs 25 25 25 25 25

BofA Global Research 25 — 25 — — 25

UBS Global Wealth 50 25 25 25 25

Management

J.P.Morgan 50 50 25 — — —

Wells Fargo 50 50 25 25 25

Nomura 25 25 25 25 25

Deutsche Bank 25 25 25 25 25 25

Morgan Stanley 25 25 25 25 25 25

Citigroup 50 50 25 25 25 25

TD Securities 25 25 25 — — —

Peel Hunt 25 25 25 25 — 25

Wells Fargo 50 25 25 — — —

Investment Institute

Barclays 25 25 25 25 25

UBS 25 25 25 — — 25

Global Research

* 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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