Most brokerages retain Fed rate-cut calls as markets scale back 2026 easing bets

March 19 (Reuters) - Traders have sharply pulled back expectations of interest-rate cuts by the U.S. Federal Reserve this year after the central bank on Wednesday held rates steady and projected higher inflation and a single reduction in borrowing costs.

Most global brokerages, however, stuck to their calls on the Fed's likely actions, citing largely in line commentary.

Powell flagged that the Fed's future path was subject to unusually high uncertainty due to the Iran war and noted individual projections show a "meaningful" number of policymakers are penciling in less easing this year than they did three months ago.

Markets are now pricing in a near 45% chance of a 25-bps rate cut in December, down from near a certainty seen before the March meeting.

Traders were predicting at least one 25-basis-point cut before the March meeting and two cuts before the Middle East conflict, LSEG data shows.

* Brokerages J.P. Morgan, RBC Capital Markets and Societe Generale retain their views that the Fed will not cut interest rates anytime in 2026, with J.P. Morgan pointing that the Fed's current monetary policy does not appear to be that restrictive based on its interest rates and inflation projections.

* Barclays remains one of the few brokerages that expect only one 25-bps rate cut this year, having pushed back its expectation on the timing to September from June last week.

* Several brokerages including Morgan Stanley, BofA Global Research, Goldman Sachs and Wells Fargo expect at least two 25-bps cuts.

* Morgan Stanley revised its expectation on the timing of the cuts to September and December from June and September following the Fed's March decision.

* Citigroup and TD Securities retain their calls for at least three 25-bps cuts this year, with Citi expecting an uptick in unemployment later this year to lead the Fed to more rate cuts. (Reporting by Shashwat Chauhan in Bengaluru; Editing by Sriraj Kalluvila)