Barclays, BofA, Goldman Push Back First Cut From March; Others Stand Pat

From our review of the January FOMC meeting (PDF here): Chair Powell's pushback against expectations for a cut at the next meeting left some analysts adjusting their base case for an initial cut from March to May or June:

• Barclays – pushes back first cut to May: “As before, we expect three additional 25bp cuts in the remaining SEP meetings in 2024 (June, September, December), and then four 25bp cuts in 2025."
• Goldman Sachs – pushes back first cut to May: "We think that the best explanation for [the January] meeting is that FOMC participants with a range of different views have compromised on likely starting a bit later, probably in May instead of March….given [Powell's comment on March cuts] as well as our expectation of solid growth in Q1 and a temporary firming in sequential inflation in January—we have pushed back our forecast of the first cut from March to May. However, we continue to expect 5 cuts in 2024 and 3 more in 2025 ...we now expect the FOMC to deliver four consecutive cuts at the May, June, July, and September meetings before slowing to a quarterly pace and adding a final cut this year in December." (Had previously seen 125bp of cuts in 2024, March/May/June/ then quarterly thereafter.)
• BofA - pushes back first cut to June: "we now look for the rate cut cycle to begin in June and expect 25bp rate cuts in June, September, and December This would mean 75bp of rate cuts this year and we retain our view of 100bp of rate cuts in 2025. We now push out the timing of our expected QT slowdown announcement from the March FOMC meeting to the May FOMC meeting." (Had seen 100bp of cuts in 2024).

Others are holding on to their base case of a March cut - further details are in MNI's Fed Review. These include:

• BNY Mellon
• Danske
• UBS