August 4 (Reuters) -Wall Street brokerages retained their expectations for a September rate cut following a soft jobs report.
Data on Friday showed nonfarm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June. Economists polled by Reuters forecast payrolls advancing by 110,000 jobs in July.
Macquarie changed its rate-cut call following the jobs data and expects the Fed to deliver its next interest rate cut in September as compared to their previous forecast
of a 25-basis-point reduction in December.
Last month, the U.S. central bank held interest rates steady and maintained its projection for two cuts this year, though a growing minority sees no cuts at all, and slightly dialed back its outlook to just one 25-basis-point cut in both 2026 and 2027.
Traders are pricing in 58.5 bps in rate cuts by year-end, according to data compiled by LSEG. They are penciling in about a 77.7% chance of a 25-bps cut in September, according to the CME Group's FedWatch tool.
Here are the forecasts from major brokerages for 2025:
Brokerage Total cuts in No. of cuts in 2025 Fed Funds Rate (end
2025 of 2025)
Citigroup 75 bps 3 (starting in
September) 3.00-3.25% (March
2026)
Wells Fargo 75 bps 3 (starting in 3.50-3.75%
September)
Goldman Sachs 75 bps 3 (Starting in 3.50-3.75%
September)
Macquarie 25 1 (in
bps September) 4.00-4.25%
J.P.Morgan 25 bps 1 (in December) 4.00-4.25%
Barclays 25 bps 1 (in December) 4.00-4.25%
Nomura 25 bps 1 (in December) 4.00-4.25%
Morgan Stanley No rate cut 0 4.25-4.50%
Deutsche Bank 25 bps 1 (in December) 4.00-4.25%
BofA Global Research No rate cut 0 4.25-4.50%
UBS Global Research 100 bps Starting in 3.25-3.50%
September
BNP No 0
Paribas rate cut 4.25-4.50%
UBS Global Wealth 100 bps (by H1 Starting in 3.25-3.50% (End of H1
Management 2026) September 2026)
HSBC 50 2 (in
bps September and 3.75-4.00%
December)
(Compiled by the Broker Research team in Bengaluru; Editing by Krishna Chandra Eluri, Devika Syamnath, Shilpi Majumdar, Vijay Kishore and Harikrishnan Nair)
