Factbox-Most brokerages retain expectations of 25-bps rate cut from US Fed in December

(Reuters) -Major brokerages reiterated their view of a 25-basis-point (bp) interest-rate cut by the U.S. Federal Reserve in December after U.S. consumer prices for October increased as expected, even as Fed Chair Jerome Powell indicated there is no need to rush rate cuts given strong U.S. economy.

The consumer price index (CPI) rose by 2.6% in October, data showed on Nov. 13, while the core rate, which strips out food and energy, rose 3.3% – in line with market expectations.

Citigroup (NYSE:C) stuck to its view of a cut of 50 bps in December, while all major brokerages continue to see a 25-bps cut post the inflation report.

Following the CPI data, Powell affirmed in prepared remarks delivered at a Dallas Fed event on Nov. 14 that ongoing economic growth, a solid job market, and inflation above its 2% target means the central bank does not need to rush to lower interest rates.

“We now see a greater risk that the FOMC(Federal Open Market Committee) could slow the pace sooner, possibly as soon as the December or January meetings,” Goldman analysts said in a note dated Nov. 14 following Powell’s remarks.

Here are the forecasts from major brokerages after the CPI data:

Rate cut estimates (in bps)

Brokerages Dec’2024 2025 Fed Funds Rate

BofA Global 25 50 3.75%-4.00% (end of

Research June)

Barclays (LON:BARC) 25 50 3.75%-4.00% (end of

2025)

Macquarie 25 100 3.25%-3.50% (through

(through June 2025)

June

2025)

Goldman Sachs 25 100 3.25%-3.50% (through

(through September 2025)

September

2025)

J.P.Morgan 25 75(throug 3.75% (through

h September 2025)

September

2025)

*UBS Global 25 125 3.00%-3.25% (through

Research end of 2025)

TD Securities 25 100 3.25%-3.50% (through

end of 2025)

Morgan Stanley (NYSE:MS) 25 100 3.375% (Q4 2025)

(through

June

2025)

Jefferies 25 100 3.25%-3.50% (through

end of 2025)

Nomura 25 25 4.00-4.25% (through

end of 2025)

*UBS Global Wealth 25 100 3.25%-3.50% (through

Management end of 2025)

Deutsche Bank (ETR:DBKGn) 25 4.375%

No Rate

Cuts

Citigroup 50 – –

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

Here are the forecasts from major brokerages before the CPI data:

Rate-cut estimates

(in bps)

Brokerages 2024

Nov Dec

BofA Global 25 25

Research

Deutsche Bank 25 25

Barclays 25 25

Macquarie 25 25

Goldman Sachs 25 25

J.P.Morgan 25 25

*UBS Global Wealth 50

Management

Citigroup 25 50