Wall Street’s leading banks have released their forecasts for the first interest rate cuts of 2024, following last week’s strong employment data and in anticipation of the Federal Reserve’s decision to keep interest rates constant this Wednesday. The banks’ estimates of the timing and size of the first rate cuts vary, with some predicting cuts as early as September, while others are not expecting cuts until December or even 2025. The expected reductions range from 25 basis points (BPS) to 100 BPS.
Bank of America, BNpp, and Deutsche Bank predict that the first interest rate cut will be made in December with a 25 BPS cut. On the other hand, banks such as Barclays, Citigroup, Evercore ISI, Goldman Sachs, HSBC, Kalshi, Morgan Stanley, Nomura, Oxford Economics, TD Securities, UBS, and Wells Fargo estimate that the first reduction will happen in September, with expected discounts ranging from 25 BPS to 75 BPS. JP Morgan and LH Meyer foresee the first rate cut in November and December respectively, with a discount of 25 BPS each.
MUFG expects the earliest and largest rate cut to be a 100 basis point cut in July. RBC also predicts the first reduction in December, with a 25 BPS reduction. However, banks like Jefferies, Mizuho, and Societe Generale do not see any interest rate cuts happening until 2025. It’s important to note that these predictions are not considered as investment advice.
Overall, the varying predictions from different banks show that there is uncertainty surrounding the timing and size of the first interest rate cuts of 2024. While some banks are forecasting cuts as early as July or September, others are more conservative in their predictions and are expecting cuts to happen later in the year or even in 2025. This uncertainty reflects the current economic uncertainty and volatility in the market, as well as the cautious approach that some banks are taking in light of recent events.
The predictions also highlight the different perspectives and strategies that banks are taking in response to the economic climate and the Federal Reserve’s decisions. Some banks are more optimistic and proactive in their predictions, while others are more cautious and conservative. This diversity of opinions and strategies is a reflection of the complex and ever-changing nature of the financial markets, and it underscores the importance of staying informed and up-to-date on the latest developments in order to make informed decisions.
In conclusion, the forecasts for the first interest rate cuts of 2024 from Wall Street’s leading banks indicate a range of opinions and strategies, with some banks predicting cuts sooner rather than later, while others are taking a more conservative approach. The varying predictions underscore the uncertainty and volatility in the current economic climate, and highlight the importance of staying informed and being prepared for potential market changes. It will be interesting to see how these predictions play out in the coming months and how the Federal Reserve’s decisions will impact the market as a whole.
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