Fed In Focus: Diverging Brokerage Predictions

Global brokerages hold differing views on the U.S. Federal Reserve's future interest rate cuts. While the Fed signaled no imminent cuts, some predict rate slashes in early 2026. Disparate timelines highlight divisions, with labor market data acting as a catalyst. The Fed's future direction remains closely monitored.

The U.S. Federal Reserve's potential interest rate cuts have triggered divergent predictions among top global brokerages. While the Fed made a 25-basis point cut recently and indicated no near-term reductions, major players like Citigroup and Morgan Stanley anticipate early 2026 cuts.

Looming economic reports, namely next week's jobs and inflation data, could strongly influence the Fed's January policy meeting. Notably, J.P. Morgan, UBS, and strategists from Goldman Sachs and Barclays also eye 2026 as pivotal for potential cuts.

Fed Chair Jerome Powell maintains a cautiously optimistic stance, citing the ability to deliberate on further moves as incoming economic data demands. Meanwhile, interest in Powell's successor grows amid speculation about changes in the Fed's leadership dynamics.

(With inputs from agencies.)