Factbox-Most brokerages expect 50 bps in rate cuts from Fed for rest of 2024

BY Reuters | ECONOMIC | 09/19/24 12:29 PM EDT

(Reuters) -Most major brokerages expect the U.S. Federal Reserve to lower interest rates by a cumulative 50 basis points in its November and December meetings, after the central bank announced an outsized reduction in its September meeting.

Fed Chair Jerome Powell called the half-percentage-point cut a "recalibration" to account for the sharp decline in inflation since last year. He noted that the economy remained strong but the central bank wanted to stay ahead of and stave off any weakening in the job market.

Here are the forecasts from major brokerages after the Fed's decision:

Rate cut estimates (in bps)

2024

Fed

2025 Funds Rate at end of

Nov Dec 2025

BofA 75 2.75%-3%

Global Research 125

UBS

Global Wealth 50 100 3.25%-3.50%

Management

Deutsche

Bank 125 3.25%-3.50%

25 25

Barclays

75 3.50%-3.75%

25 25

Morgan

Stanley 100 3.25%-3.50% (through

25 25 (through June 2025)

June

2025)

Macquarie 100 3.25%-3.50% (through

25 25 (through June 2025)

June

2025)

Goldman

Sachs 100 3.25%-3.50% (through

25 25 (through June 2025)

June

2025)

Citigroup

50 25

J.P.

Morgan

50 25

Here are the forecasts from major brokerages ahead of the Fed's decision:

Rate cut estimates (in bps)

Sept Nov Dec

Goldman Sachs 25 25 25

BofA Global Research 25 25 25

UBS Global Wealth 50 25 25

Management

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 25 50 50

Wells Fargo 50 25 25

Investment Institute

Barclays 25 25 25

UBS Global Research 25 25 25

HSBC 25 25 25

Macquarie 25 25 25

* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group

* Wells Fargo Investment Institute is a wholly owned subsidiary of Wells Fargo Bank

(Compiled by the Broker Research team in Bengaluru; Editing by Devika Syamnath)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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