Brokerages predict September rate cut as market braces for Powell speech

(Reuters) - Most brokerages have forecast a 25 basis points interest rate cut by the U.S. Federal Reserve in September, even as financial markets strap in for clearer cues from Chair Jerome Powell's Jackson Hole speech on Friday.

Powell's speech comes after the central bank's readout of its July meeting minutes showed a "vast majority" of policymakers agreed the policy easing would likely begin next month.

Four of the brokerages, J.P. Morgan, Citigroup, UBS Global Wealth Management and Wells Fargo, expect a 50 bps rate cut in the next Fed meeting in September.

Nearly all brokerages expect the Fed to cut rates in all the three remaining meetings of the year, a view echoed by 55 of 101 economists polled by Reuters.

Here are the latest forecasts from major brokerages ahead of Powell's speech at the conference:

Rate cut estimates (in bps)

Sept Nov Dec

Goldman Sachs 25 25 25

BofA Global Research 25 -- 25

UBS Global Wealth 50 25 25

Management

J.P.Morgan 50 50 25

Wells Fargo 50 50 25

Nomura 25 25 25

Deutsche Bank 25 25 25

Morgan Stanley 25 25 25

Citigroup 50 50 25

TD Securities 25 25 25

Peel Hunt 25 25 25

Wells Fargo 50 25 25

Investment Institute

Barclays 25 25 25

UBS Global Research 25 25 25

* Wells Fargo Investment Institute is a wholly owned subsidiary of Wells Fargo Bank

** UBS Global Research and UBS Global Wealth Management are distinct, independent divisions of UBS Group

(Compiled by the Broker Research team in Bengaluru; Editing by Shinjini Ganguli and Varun H K)