Most Wall Street brokerages reaffirmed their rate cut forecasts after the U.S. Federal Reserve kept its policy rate unchanged this week.
The U.S. central bank held interest rates steady as expected and maintained its projection for two cuts this year, though a growing minority sees no cuts at all, and slightly dialed back its outlook to just one 25-basis-point cut in both 2026 and 2027.
Macquarie now expects a 25 bps rate cut in 2025, a shift from its earlier forecast of no cuts previously, while UBS Global Research forecasts a total of 100 bp cuts by year-end.
Traders are pricing in 48 bps of rate cuts by year-end, according to data compiled by LSEG. They are penciling in a 59 per cent chance of a 25-bps cut in September, according to the CME Group’s FedWatch tool.
Here are the forecasts from major brokerages after Fed’s meeting:
| Brokerage | Total cuts in 2025 | No. of cuts in 2025 | Fed Funds Rate (end of 2025) |
|---|---|---|---|
| Citigroup | 75 bps | 3 (starting in September) | 3.50-3.75% |
| Wells Fargo | 75 bps | Starting in September | 3.50-3.75% |
| J.P.Morgan | 25 bps | 1 (in December) | 4.00-4.25% |
| Goldman Sachs | 25 bps | 1 (in December) | 4.00-4.25% |
| Barclays | 25 bps | 1 (in December) | 4.00-4.25% |
| ING | 50 bps | 2 (H2 2025) | 3.75-4.00% |
| Nomura | 25 bps | 1 (in December) | 4.00-4.25% |
| Morgan Stanley | No rate cut | 0 | 4.25-4.50% |
| Deutsche Bank | 25 bps | 1 (in December) | 4.00-4.25% |
| BofA Global Research | No rate cut | 0 | 4.25-4.50% |
| Macquarie | 25 bps | 1 (in December) | 4.00-4.25% |
| UBS Global Research | 100 bps | Starting in September | 3.25-3.50% |
(Compiled by the Broker Research team in Bengaluru; Editing by Krishna Chandra Eluri, Devika Syamnath, Shilpi Majumdar and Vijay Kishore)
