Brokerages retain September rate cut bets after soft jobs report
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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 dialled 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 pencilling 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 2025 | No. of cuts in 2025 | Funds Rate (end of 2025) |
| Citigroup | 75 bps | 3 (starting in September) | 3.00-3.25% (March 2026) |
| Wells Fargo | 75 bps | 3 (starting in September) | 3.50-3.75% |
| Goldman Sachs | 75 bps | 3 (starting in September) | 3.50-3.75% |
| Macquarie | 25 bps | 1 (in 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 September | 3.25-3.50% |
| BNP Paribas | No rate cut | 0 | 4.25-4.50% |
| UBS Global Wealth Management | 100 bps (by H1 2026) | Starting in September | 3.50% (End of H1 2026) |
| HSBC | 50 bps | 2 (in September and December) | 3.75-4.00% |
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