Wall Street Banks Readjusts 2024 Interest Rate Predictions After Fed's Dovish Turn
Portfolio Pulse from Bibhu Pattnaik
Wall Street banks have adjusted their 2024 interest rate forecasts after the Federal Reserve's dovish pivot, suggesting potential rate cuts. The Fed's projections show a decrease in expected end-of-2024 interest rates to 4.6%. Bank of America (BAC) sees a 90% chance of a rate cut by March. Goldman Sachs (GS) predicts three 25 basis point cuts in the first half of the year, while JPMorgan (JPM) expects the first cut in June with a target range 125 basis points lower by year-end. Macquarie Group Ltd forecasts nine 25-basis point rate cuts in 2024.
December 16, 2023 | 9:27 pm
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Bank of America predicts a 90% likelihood of a Fed rate cut by March 2024, indicating a dovish market outlook.
Bank of America's prediction of a rate cut could lead to increased borrowing and potentially boost the financial sector, including BAC's stock in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Goldman Sachs forecasts three consecutive 25 basis point cuts in the first half of 2024, indicating a more aggressive easing stance.
Goldman Sachs' forecast for earlier and faster rate cuts could lead to a positive outlook for the financial markets, potentially benefiting GS's stock in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
JPMorgan predicts the first rate cut in June 2024, with a target range 125 basis points lower by year-end, suggesting a sooner-than-expected easing.
JPMorgan's revised outlook for an earlier rate cut could be beneficial for the banking sector, potentially leading to a positive impact on JPM's stock in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80