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J.P.Morgan and BofA Global Research, along with other major brokerages, have revised their forecasts and now expect the U.S. Federal Reserve to decrease Interest rates by 25 basis points in November. This adjustment comes after the strong U.S. nonfarm payrolls data indicated a resilient economy. Goldman Sachs, Barclays, Macquarie, and Deutsche Bank also maintain their predictions of a 25 bps rate cut in both November and December.
Forecasts from various brokerages after the release of the jobs report show estimates for rate cuts in 2024 and 2025, with expected changes in the Fed Funds Rate by the end of 2025. For instance, BofA Global Research anticipates a 25 bps cut in November and December, resulting in a Fed Funds Rate of 3.0%-3.25% by the end of 2025. Deutsche Bank, Barclays, Macquarie, and Goldman Sachs also maintain similar forecasts for rate cuts and the Fed Funds Rate. On the other hand, J.P.Morgan predicts a 25 bps cut in November and December with a Fed Funds Rate of 3.0% by September 2025, while UBS Global Wealth Management expects a 50 bps cut in November and 100 bps cut in December, leading to a Fed Funds Rate of 3.25%-3.50%.
Before the release of the jobs data, brokerages had made their initial forecasts for rate cuts in 2024 and 2025. Although there were some adjustments post-jobs report, the forecasts remained relatively consistent among the major players in the market.
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SOURCE
Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
