(Reuters) – The U.S. Federal Reserve cut interest rates by an oversized 50 basis points in its Sept. 17-18 meeting that Chair Jerome Powell said was meant to show policymakers’ commitment to sustaining a low unemployment rate now that inflation had eased.
Fed policymakers also projected the benchmark interest rate would fall by another half percentage point by the end of this year, a full percentage point next year, and half a percentage point in 2026, though they cautioned that the outlook that far into the future was inherently uncertain.
Following are forecasts from some major banks on economic growth, inflation, and how they expect certain asset classes to perform:
Forecasts for stocks, currencies and bonds
S&P 500 US 10-year EUR/USD USD/JPY USD/CNY
target yield
target
Goldman Sachs 6,000 3.85% 1.08 150 7.20
Morgan Stanley (NYSE:MS) 5,400(for 1 140 7.5
June 2025)
UBS Global 5,200 3.85% 1.09 148 7.20
Wealth
Management*
Wells Fargo (NYSE:WFC) 6,200-6,400 3.75%-4.25% 1.06-1.10 156-160
Investment (year-end
Institute 2025)
(WFII)
Barclays 5,600 4.25% 1.09 145 7.20
J.P.Morgan 4,200 3.55% 1.13 146 7.25
BofA Global 5,400 3.50% 1.12 151 7.30
Research
Deutsche Bank (ETR:DBKGn) 5,750 3.80% 1.07 135
Citigroup (NYSE:C) 5,600 4.20% 1.08 141 7.20
HSBC 5,900 3.00% 1.05 145 7.10
Oppenheimer
5,900
UBS Global 5,850 4.0% 1.12 145 6.95
Research*
Evercore ISI 6,000
RBC 5,700
—–
U.S. INFLATION
U.S. consumer prices rose slightly more than expected in September, but the annual increase in inflation was the smallest in more than 3-1/2 years, potentially keeping the Federal Reserve on track to cut interest rates again in November.
U.S. inflation (annual Y/Y for 2024)
Headline CPI Core PCE
Goldman Sachs 2.6%
2.7%
Morgan Stanley 2.10% 2.70%
Wells Fargo 3.0% 2.60%
Investment
Institute
Barclays 2.9% 2.6%
J.P.Morgan 2.50% 2.50%
BofA Global 3.5% 2.8%
Research
Deutsche Bank 3.10%
Citigroup 2.0% 2.7%
HSBC 3.4%
—–
Real GDP growth forecasts for 2024
GLOBAL U.S. CHINA EURO UK INDIA
AREA
Goldman 2.7% 2.8% 4.9% 0.9% 6.7%
Sachs 0.8%
Morgan 2.8% 1.9% 4.2% 0.5% -0.1% 6.4%
Stanley
UBS Global 3.1% 2.4% 4.9% 0.6% 0.2% 7.0%
Wealth
Management*
Barclays 2.6% 1.2% 5.0% 0.3% 1.1% 6.2%
J.P.Morgan 2.7% 4.8% 0.9% 6.5%
0.8%
2.7%
BofA Global 3.1% 2.7% 4.8% 0.7% 1.1% 7.1%
Research
Deutsche 3.2% 2.7% 4.7% 0.9% 1.2% 7.0%
Bank
Citigroup 2.6% 2.5% 4.7% 1.0% 7.1%
0.8%
HSBC 2.6% 2.3% 4.9% 0.5% 0.4% 6.3%
UBS Global 2.7% 4.8% 6.8%
Research* 0.6%
3.1% 1.0%
* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group
