FACTBOX-Top brokerages sharply split on Fed's 2026 policy outlook
Goldman Sachs Group, Inc. GS | 0.00 |
Updates with Goldman Sachs and BofA Global Research forecasts
May 11 (Reuters) - Global brokerages have scaled back expectations of two U.S. interest rate cuts this year, with forecasts now split between some easing and no cuts at all in 2026, amid elevated inflation risks and cautious policymakers.
Data on Friday showed U.S. job growth exceeded expectations in April, while the unemployment rate held steady at 4.3%, underscoring the labor market's resilience.
BofA Global Research and Goldman Sachs are the latest to push back their U.S. rate-cut forecasts, with BofA now expecting the Fed to stay on hold through this year and Goldman delaying cuts until late 2026.
Traders are pricing in a roughly 71.5% probability that the Fed will hold rates through the end of 2026, according to CME FedWatch tool.
Here are the forecasts from major brokerages for 2026:
Brokerage |
Total cuts in 2026 |
No. of cuts in 2026 |
Fed Funds Rate |
Citigroup |
75 bps |
3 (in September, October and December) |
2.75%-3.00% |
Wells Fargo |
50 bps |
2 (in June and September) |
3.00-3.25% |
UBS Global Wealth Management |
50 bps |
2 (September and December) |
3.00%-3.25% |
Nomura |
50 bps |
2 (September and December) |
3.00-3.25% |
Goldman Sachs |
25 bps |
1 (in December) |
3.25%-3.50% |
UBS Global Research |
25 bps |
1 (in December) |
3.25%-3.50% |
BofA Global Research |
No rate cuts |
- |
3.50%-3.75% |
Barclays |
No rate cuts |
- |
3.50%-3.75% |
Morgan Stanley |
No rate cuts |
- |
3.50%-3.75% |
Deutsche Bank |
No rate cuts |
- |
3.50%-3.75% |
BNP Paribas |
No rate cuts |
- |
3.50%-3.75% |
HSBC |
No rate cuts |
- |
3.50%-3.75% |
J.P. Morgan |
No rate cuts |
- |
3.50%-3.75% |
Wells Fargo Investment Institute |
No rate cuts |
- |
3.50%-3.75% |
Standard Chartered |
No rate cuts |
- |
3.50%-3.75% |
Societe Generale |
No rate cuts |
- |
3.50%-3.75% |
Macquarie |
Rate hike (in H1 2027) |
- |
- |