(Reuters) -Several major brokerages have tempered their predictions for how much the Federal Reserve will lower interest rates in 2025, if at all, after a surprisingly strong U.S. employment report on Friday pointed to resilient economic growth.
At least one brokerage, BofA Global Research, said in a note it thought the easing cycle was over and it was likely the Fed would hold for an extended period. “But we think the risks for the next move are skewed toward a hike.”
After cutting rates by a quarter of a percentage point at the Dec. 17-18 meeting, Fed Chair Jerome Powell said policymakers could now be “cautious” about further reductions.
Here are the forecasts from major brokerages for 2025 after the jobs report:
Rate cut estimates (in bps)
Brokerages Jan 2025 2025 Fed Funds Rate
BofA Global No rate cut No rate cut 4.25-4.50%(end of
Research December)
Barclays (LON:BARC) No rate cut
25 (in 4.00-4.25% (end of
June) 2025)
Goldman Sachs No rate cut 50 (June 3.75-4.00% (through
and December)
December)
J.P.Morgan No rate cut 75(starting 3.50-3.75% (through
in June) September 2025)
Morgan Stanley (NYSE:MS) No rate cut 50 (through 3.75-4.00% (through
June 2025) June 2025)
Deutsche Bank (ETR:DBKGn) No rate cut No Rate 4.25-4.50% (end of
Cuts 2025)
ING No rate cut 75
3.50-3.75%
UBS Global No rate cut 50 3.75-4.00% (end of
Wealth 2025)
Management
Citigroup (NYSE:C) No rate cut 125 3.00-3.25% (end of
(starting 2025)
in May)
Macquarie No rate cut 25 4.00-4.25%
No rate cut No rate cut
Berenberg 4.25-4.50% (end of
2025)
No rate cut 50
Scotiabank (TSX:BNS) 3.75-4.00% (end of
2025)
Wells Fargo (NYSE:WFC) No rate cut – –
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
Here are the forecasts from major brokerages for 2025 before the jobs report:
Rate cut estimates (in bps)
Brokerages Jan 2025 2025 Fed Funds Rate
BofA Global No rate cut 50 3.75-4.00% (end of
Research June)
Barclays No rate cut 50 3.75-4.00% (end of
2025)
Goldman Sachs No rate cut 75 (through 3.50-3.75% (through
September September 2025)
2025)
J.P.Morgan No rate cut 75(through 3.50-3.75% (through
September September 2025)
2025)
Morgan Stanley No rate cut 50 (through 3.75-4.00% (through
June 2025) June 2025)
Nomura No rate cut 25 4.00-4.25% (through
end of 2025)
*UBS Global No rate cut 125 3.00-3.25% (through
Research end of 2025)
Deutsche Bank No rate cut No Rate 4.25-4.50%
Cuts
Societe No rate cut – 3.00-3.25% (by early
Generale 2026)
ING No rate cut 75 3.75 – 4.00%
Macquarie No rate cut 25 4.00-4.25%
UBS Global No rate cut 50 3.75-4.00% (end of
Wealth 2025)
Management
Peel Hunt No rate cut 50 3.50-4.00%