Institutional Outlook on Fed Rate Path: Rate Cut Room Already Quite Limited, Possibly Only One Rate Cut This Year

Mars Finance News: On March 18th, at 2 a.m. Beijing time, the Federal Reserve will announce its interest rate decision. The market has fully priced in no change in rates and is now focusing on Fed Chair Powell’s statements during the monetary policy press conference. Institutional forecasts are as follows:

1. Berenberg: There is limited room for further rate cuts. The Fed is expected to implement the final 25 basis point cut of this cycle at the June meeting.
2. Goldman Sachs: Expect rate cuts of 25 basis points in September and December. If the labor market softens earlier and more severely than expected, rate cuts could come sooner.
3. Deutsche Bank: Rates are likely to remain unchanged this week. Rising geopolitical uncertainties and inflation risks driven by soaring oil prices are eroding the space for rate cuts.
4. Crédit Agricole: Rates are expected to stay steady until the end of the year. Some members may advocate ignoring the short-term inflation spike driven by energy, but most members are inclined to be more cautious.
5. Rabobank: Under Powell’s leadership, the Fed is likely to continue a wait-and-see stance; if Waller takes over, the Fed may become more aggressive and push for rate cuts to counteract economic slowdown.
6. TS Lombard: Concerns about the labor market are resurfacing. If energy shocks subside within a few weeks, combined with the inflation base effects from tariffs in the second half of the year and a rapid slowdown in rent inflation, there is still a possibility of two rate cuts within the year. (Jin10)