Dec 2 (Reuters) – BofA Global Research became the latest brokerage to forecast an interest rate cut by the U.S. Federal Reserve in December, as dovish signals from key voting members and weakness in labor market conditions ramped up hopes of lower borrowing costs. The Wall Street brokerage joined global peers like J.P.Morgan and Goldman […]
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Factbox-Major brokerages boost bets on December Fed rate cut ahead of policy meeting
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Dec 2 (Reuters) – BofA Global Research became the latest brokerage to forecast an interest rate cut by the U.S. Federal Reserve in December, as dovish signals from key voting members and weakness in labor market conditions ramped up hopes of lower borrowing costs.
The Wall Street brokerage joined global peers like J.P.Morgan and Goldman Sachs who expect a quarter-point reduction when the Federal Open Market Committee meet for their last policy meeting of the year on December 9 and 10.
Traders are pricing in an 87.2% chance of a 25-basis-point interest rate cut in December, according to CME Group’s FedWatch Tool.
Morgan Stanley and Standard Chartered are among the few expecting the central bank to remain on hold next week.
Here are the forecasts from major brokerages for December policy meeting:
Brokerage December policy Fed Funds Rate (end
meeting of 2025)
Citigroup 25 bps 3.50-3.75%
Wells Fargo 25 bps 3.50-3.75%
Goldman Sachs 25 bps 3.50-3.75%
J.P.Morgan 25 bps 3.50-3.75%
Barclays 25 bps 3.50-3.75%
Nomura No cut 3.75-4.00%
Morgan Stanley No cut 3.75-4.00%
Deutsche Bank 25 bps 3.50-3.75%
BofA 25 bps
Global Research 3.50-3.75%
BNP Paribas 25 bps 3.50-3.75%
HSBC 25 bps 3.50-3.75%
Standard No cut 3.75-4.00%
Chartered
Macquarie No cut 3.75-4.00%
UBS Global 25 bps 3.50-3.75%
Research
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
(Compiled by the Broker Research team in Bengaluru; Editing by Krishna Chandra Eluri and Anil D’Silva)