Factbox: Global brokerages expect Fed rate hikes after strong inflation report
FACTBOX-Global brokerages expect Fed rate hikes after strong inflation report Updates with Goldman Sachs, J.P. Morgan, Citigroup, Nomura and HSBC Fed forecast, and rewrites throughout
Sept 14 (Reuters) - Global brokerages expect the Federal Reserve to raise interest rates this year after stronger-than-expected inflation readings reinforced bets that policymakers will keep tightening monetary policy.
Data on Friday showed U.S. consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months, reinforcing expectations that the Federal Reserve will raise interest rates this week.
Goldman Sachs, J.P.Morgan and HSBC are among the latest brokerages forecasting a quarter-point increase at the Fed's September 15-16 meeting, with several addressing that policymakers may need to keep rates higher for longer to return inflation to the central bank's 2% target.
Traders now see an about 88.5% chance of a quarter-point Fed rate hike in September, and 97.9% probability that rates will be higher by December, according to CME FedWatch data.
Here are the forecasts from major brokerages for 2026:
Brokerage | Total cuts/hikes in 2026 | No. of cuts/hikes in 2026 | Fed funds rate |
BofA Global Research | 75 bps of hikes | 3 (September, October and December) | 4.25%-4.50% |
Goldman Sachs | 50 bps rate hike | 2 (September and December) | 4.00%-4.25% |
J.P.Morgan | 50 bps rate hike | 2 (September and December) | 4.00%-4.25% |
Nomura | 50 bps of hikes | 2 (September and December) | 4.00%-4.25% |
HSBC | 50 bps of hikes | 2 (September and December) | 4.00%-4.25% |
Barclays | 50 bps of hikes | 2 (September and December) | 4.00%-4.25% |
Deutsche Bank | 50 bps of hikes | 2 (September and December) | 4.00%-4.25% |
Macquarie | 25 bps rate hike | 1 (September) | 3.75%-4.00% |
BNP Paribas | 25 bps rate hike | 1 (December) | 3.75%-4.00% |
Citigroup | 25 bps rate hike | 1 (September) | 3.75%-4.00% |
Wells Fargo Investment Institute | 25 bps rate hike | 1 | 3.75%-4.00% |
UBS Global Wealth Management | 50 bps of hikes | 2 | 4.00%-4.25% |
UBS Global Research | 50 bps of hikes | 2 | 4.00%-4.25% |
* Wells Fargo Investment Institute is a wholly owned subsidiary of Wells Fargo Bank
(Compiled by the Broker Research team in Bengaluru; Editing by Shinjini Ganguli, Eileen Soreng, Joyjeet Das, Harikrishnan Nair, Pooja Desai and Devika Syamnath)
((JoelJose@thomsonreuters.com;Rashika.Singh@thomsonreuters.com))