Banks Shift December Rate Cut Outlook Amid Dovish Fed Remarks

Benzinga

Major banks now expect the Fed to cut rates in December after softer data and dovish signals from policymakers. Traders are pricing in a high probability of a quarter-point cut, with banks projecting additional reductions through early 2025.

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00:00It's Benzinga bringing Wall Street to Main Street.

00:03Morgan Stanley now expects the Federal Reserve to cut rates by a quarter point in December

00:07after dovish comments from policymakers and softer U.S. data at the end of November,

00:12according to Reuters. J.P. Morgan and Boa Fee Global Research also shifted from earlier

00:17forecasts that projected no cut in December. Morgan Stanley said Chair Powell will likely

00:22trade the cut for language, signaling a higher bar for additional moves.

00:27Traders are pricing in an 87.2% chance of a quarter point cut at the December meeting,

00:32according to the CME FedWatch tool. Morgan Stanley now expects 25 basis point cuts in January and

00:38April. J.P. Morgan expects another cut in January and Boa Fee Projects cuts in June and July.

00:43For all things money, visit Benzinga.com.

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