The Big Day is Near – Ahead of Wednesday’s FED Rate Decision, Wall Street’s Big Banks Predict Rate Cut Dates

Wall Street's leading banks announced their forecasts for the first interest rate cuts of 2024, following last week's strong employment data and in anticipation of the FED's decision to keep interest rates constant this Wednesday.

Banks' estimates of the timing and size of the first rate cuts vary; some are expected as early as September, some are not expected until December or even 2025. Expected reductions range from 25 basis points (BPS) to 100 BPS.

Here are banks' interest rate reduction predictions based on their own current data:

• Bank of America, BNpp and Deutsche Bank expect the first interest rate cut to be made in December with a 25 BPS cut.
• 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 be made in September. Expected discounts range from 25 BPS to 75 BPS.
• JP Morgan and LH Meyer predict the first reduction 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.
• Jefferies, Mizuho and Societe Generale do not foresee any interest rate cuts until 2025.

*This is not investment advice.