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(Reuters) -Most brokerages still expect a slower pace of interest-rate cuts from the U.S. Federal Reserve in 2025, following tepid jobs data on Friday and ongoing uncertainty around President Donald Trump's tariff policy.
U.S. job growth slowed more than expected in January after two months of strong gains, but an unemployment rate of 4% will likely allow the Fed to hold off cutting rates at least until June.
On the other hand, President Trump's tariff policy is expected to drive up inflation and increase pressure on the U.S. central bank as it looks to control persistently high prices.
The Fed left its benchmark overnight interest rate in the 4.25%-4.50% range in its January policy meeting and Chair Jerome Powell said there would be no rush to cut them again until inflation and jobs data made it appropriate.
Here are the forecasts from brokerages after Friday's non-farm payrolls (NFP) data:
Rate cut estimates (in bps)
Brokerages Mar 2025 2025 No. of cuts Fed Funds Rate
in 2025
BofA Global No rate cut No rate cut 0 4.25-4.50%(end of
Research December)
Barclays No rate cut 25 (in June) 1 4.00-4.25% (end of
2025)
BNP Paribas No rate cut No rate cut 0 4.25-4.50%(end of
December)
Goldman Sachs No rate cut 50 (June and 2 3.75-4.00% (through
December) December)
J.P.Morgan No rate cut 50(June and - 3.75-4.00% (through
September) September 2025)
Morgan Stanley No rate cut 25 (in June) 1 4.00-4.25% (in 2025)
Deutsche Bank No rate cut No rate cut 0 4.25-4.50% (end of
2025)
ING No rate cut 50 (H2 2025) 2 3.75-4.00% (end of
2025)
UBS Global No rate cut 50 - 3.75-4.00% (end of
Wealth 2025)
Management
Citigroup No rate cut 125 (starting 5 3.00-3.25% (end of
in May) 2025)
Macquarie No rate cut 25 1 4.00-4.25%
Berenberg No rate cut No rate cut 0 4.25-4.50% (end of
2025)
Wells Fargo No rate cut 50 (September 2 3.75-4.00% (end of
and December) 2025)
Nomura No rate cut No rate cut 0 -
HSBC No rate cut 75 (starting 3 3.50%-3.75% (end of
in June) 2025)
Here are the forecasts from major brokerages before NFP data:
Rate cut estimates (in bps)
Brokerages Mar 2025 2025 No. of cuts Fed Funds Rate
in 2025
BofA Global No rate cut No rate cut 0 4.25-4.50%(end of
Research December)
Barclays No rate cut 25 (in June) 1 4.00-4.25% (end of
2025)
BNP Paribas No rate cut No rate cut 0 4.25-4.50%(end of
December)
Goldman Sachs No rate cut 50 (June and 2 3.75-4.00% (through
December) December)
J.P.Morgan No rate cut 50(June and - 3.75-4.00% (through
September) September 2025)
Morgan Stanley No rate cut 25 (in June) 1 4.00-4.25% (in 2025)
Deutsche Bank No rate cut No rate cut 0 4.25-4.50% (end of
2025)
ING No rate cut 50 (H2 2025) 2 3.75-4.00% (end of
2025)
UBS Global No rate cut 50 - 3.75-4.00% (end of
Wealth 2025)
Management
Citigroup No rate cut 125 (starting 5 3.00-3.25% (end of
in May) 2025)
Macquarie No rate cut 25 1 4.00-4.25%
Berenberg No rate cut No rate cut 0 4.25-4.50% (end of
2025)
Wells Fargo No rate cut 50 (September 2 3.75-4.00% (end of
and December) 2025)
Nomura No rate cut No rate cut 0 -
HSBC No rate cut 75 (starting 3 3.50%-3.75% (end of
in June) 2025)
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
(Compiled by the Broker Research team in Bengaluru; Edited by Shounak Dasgupta and Devika Syamnath)
