Major brokerages see slower pace of Fed rate cuts despite Trump tariff uncertainty

(Reuters) - Major brokerages maintained their predictions for a slower pace of interest-rate cuts by the U.S. Federal Reserve after the central bank kept its benchmark interest rate unchanged on Wednesday.

The Fed left its benchmark overnight interest rate in the 4.25%-4.50% range, with Chair Jerome Powell describing the current uncertainty as "unusually elevated," citing challenges in making new economic projections due to recent Trump administration policy changes.

The Fed also forecast slower economic growth and higher inflation.

Currently, traders expect two rate cuts of 25 basis points each for the year, according to data compiled by LSEG. The Federal Open Market Committee (FOMC) is scheduled to meet again on May 6-7.

Here are the forecasts from major brokerages following the March meeting:

Brokerage Total cuts in No. of cuts in 2025 Fed Funds Rate

2025

Deutsche Bank No rate cut 0 4.25-4.50% (end of

2025)

Morgan Stanley 25 bps 1 (25 bps in June) 4.00-4.25% (in 2025)

Goldman Sachs 50 bps 2 (25 bps each in 3.75-4.00% (through

June and December) December)

J.P.Morgan 50 bps 2 (25 bps each in 3.75-4.00% (through

June and September) September 2025)

Citigroup 125bp 5 (starting in May) 3.00-3.25% (end of

2025)

Barclays 50 bps 2 (25 bps each in 3.75-4.00% (through

June and September) September)

Berenberg No rate cut 0 4.25-4.50% (end of

2025)

Nomura No rate cut 0 4.25-4.50% (end of

2025)

HSBC 75 bps 3 (25 bps each in 3.50-3.75% (end of

June, September and 2025)

December)

ING 50 bps 2 (H2 2025) 3.75-4.00% (end of

2025)

(Compiled by the Broker Research team in Bengaluru; Editing by Anil D'Silva and Mrigank Dhaniwala)