Factbox: Major brokerages expect next Fed rate hike in December
FACTBOX-Major brokerages expect next Fed rate hike in December Updates with Citigroup forecast
Oct 15 (Reuters) - Global brokerages largely expect the US Federal Reserve to raise interest rates at least once more this year after data on Wednesday showed consumer prices accelerated in September, reinforcing expectations that policymakers may need to keep borrowing costs higher for longer.
Citigroup became the latest major brokerage to forecast the Fed's next rate increase in December, though several strategists said consecutive hotter-than-expected core inflation readings have made an October move a clear possibility.
The central bank is scheduled to hold its next policy meeting on October 27 and 28.
Interest-rate futures are pricing in a roughly 27% chance of a rate increase at the October meeting and an 89.5% probability of a move in December, according to CME's FedWatch data.
Here are the forecasts from major brokerages for 2026:
Brokerage | Total hikes in 2026 | No. of hikes in 2026 | Fed funds rate |
BofA Global Research | 50 bps of hikes | 2 (October and December) | 4.25%-4.50% |
Goldman Sachs | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
J.P.Morgan | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
Nomura | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
HSBC | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
Barclays | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
Deutsche Bank | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
UBS Global Wealth Management | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
UBS Global Research | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
Morgan Stanley | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
Macquarie | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
Standard Chartered | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
Citigroup | 25 bp rate hike | 1 (December) | 4.00%-4.25% |
(Compiled by the Broker Research team in Bengaluru; Editing by Shinjini Ganguli, Eileen Soreng, Joyjeet Das, Harikrishnan Nair, Pooja Desai, Devika Syamnath and Tasim Zahid)
((JoelJose@thomsonreuters.com;Rashika.Singh@thomsonreuters.com))