MNI Fed Preview - July 2024: Analyst Outlook

Note to readers: This update of our Jul 26 Fed preview includes sell-side analyst expectations (starting Page 29)

EXECUTIVE SUMMARY:

• No sell-side analysts whose previews were seen by MNI expect the FOMC to cut rates at the July meeting, with an overwhelming consensus that the Committee will begin easing in September.
• We saw only one exception: BofA sees the first cut only in December (25bp).
• While – again with the exception of BofA - the majority of analysts see 50bp of cuts this year (mostly Sept and Dec), a handful see 75bp of reductions in 2024. For 2025, though, opinions differ widely.
• Some see September marking the start of a prolonged set of reductions reaching 225bp through end-2025.
• Others see cuts later this year as merely precautionary, with resurgent inflation / post-election policy risk set to curtail the easing cycle, potentially with a stop-start pace.
• Most analysts expect some modest adjustments to the July Statement, and primarily in the opening paragraphs with regard to the characterization of inflation / employment, and the development in the balance of risks to Fed achieving its dual mandate.
• However, there are a few analysts that see changes to the forward rate guidance to various degrees that would more clearly signal an intention to cut in September: these include Citi, Deutsche, Goldman, JPMorgan, TD, UBS, UniCredit.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK (ANALYST SECTION STARTS ON PAGE 29):

FedPrevJul2024 - with analysts.pdf