The consumer price index (CPI) rose by 2.6% in October, data showed on November 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 November 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 November 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
Research 50 3.75%-4.00% (end of
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 3.25%-3.50% (through
100 September 2025)
(through
September
2025)
J.P.Morgan 25 3.75%
(through September
75(throug 2025)
h
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 3.375% (Q4 2025)
100
(through
June
2025)
Jefferies 100
25 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 – –
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
Source: Economy - investing.com
