Global brokerages unevenly split on Fed policy path
TLT•Brokerages split on the Fed's policy path
August 18 (Reuters) - Global brokerages are increasingly diverging on the Federal Reserve's future policy path, with a growing number of research firms expecting at least one hike this year, as market participants navigate oil price volatility and limited central bank guidance.
Wells Fargo Investment Institute became the latest to predict a 25-basis-point rate increase this year. It previously expected the Fed to keep rates steady until the end of 2027.
The widely expected decision to leave policy on hold in July drew dissents from three of the 12 members of the Federal Open Market Committee, who wanted a quarter-percentage point hike instead.
Traders are pricing in a nearly 35% chance the Fed will raise rates by 25 basis points next month, compared with a 48.4% chance a week ago, according to CME's FedWatch tool.
Here are the forecasts from major brokerages for 2026:
| Brokerage | Total cuts/hikes in 2026 | No. of cuts/hikes in 2026 | Fed Funds Rate |
|---|---|---|---|
| Citigroup | 50 bps of cuts | 2 (in October and December) | 3.00%-3.25% |
| Wells Fargo | No policy change | - | 3.50%-3.75% |
| UBS Global Wealth Management | No policy change | - | 3.50%-3.75% |
| UBS Global Research | No policy change | - | 3.50%-3.75% |
| Goldman Sachs | No policy change | - | 3.50%-3.75% |
| Nomura | No policy change | - | 3.50%-3.75% |
| Barclays | No policy change | - | 3.50%-3.75% |
| Morgan Stanley | No policy change | - | 3.50%-3.75% |
| HSBC | No policy change | - | 3.50%-3.75% |
| Standard Chartered |
