Morgan Stanley, Standard Chartered and Nomura are the latest major brokerages to predict that the U.S. Federal Reserve will cut interest rates in December. Their expectations strengthened after softer labor market data and dovish comments from key Fed voting members increased confidence in lower borrowing costs.
These firms join other large institutions, including J.P. Morgan and Goldman Sachs, which also anticipate a quarter-point rate cut at the Federal Open Market Committee’s final policy meeting of the year on December 9–10.
Market sentiment has shifted strongly in favor of a reduction. According to the CME FedWatch Tool, traders are pricing in an 87.4% probability of a 25-basis-point cut in December.
Below are the December Fed policy forecasts from major brokerages, all projecting the same outcome:
Brokerage Forecast – December Policy Meeting (Fed Funds Rate end-2025)
• Citigroup: 25 bps cut → 3.50–3.75%
• Wells Fargo: 25 bps cut → 3.50–3.75%
• Goldman Sachs: 25 bps cut → 3.50–3.75%
• J.P. Morgan: 25 bps cut → 3.50–3.75%
• Barclays: 25 bps cut → 3.50–3.75%
• Nomura: 25 bps cut → 3.50–3.75%
• Morgan Stanley: 25 bps cut → 3.50–3.75%
• Deutsche Bank: 25 bps cut → 3.50–3.75%
• BofA Global Research: 25 bps cut → 3.50–3.75%
• BNP Paribas: 25 bps cut → 3.50–3.75%
• HSBC: 25 bps cut → 3.50–3.75%
• Standard Chartered: 25 bps cut → 3.50–3.75%
• UBS Global: 25 bps cut → 3.50–3.75%
All major brokerages listed are aligned in their view that the Fed will reduce rates by a quarter point at the end of the year.
