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MNI Fed Preview - June 2024: Analyst Outlook

Sell-side Fed rate cut views continue to be pushed back as the June 2024 FOMC meeting approaches.

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  • Note to readers: This is an update to the MNI Fed preview published on Friday June 7. Please see Page 23-28 of this document for sell-side analysts' outlooks for the June 12 FOMC decision and future policy.

EXECUTIVE SUMMARY:

September In Focus

Sell-side Fed rate cut views continue to be pushed back as the June 2024 FOMC meeting approaches, now converging on September as the timing for the first cut. Ahead of March’s meeting, consensus was firmly on June.

  • There are still one or two expectations for a July cut, but otherwise it’s nearly unanimous that the first Fed cut will come in Sep or Dec. JPMorgan eyes November, with SocGen the most hawkish on this front, eyeing Q1 2025.
  • The median analyst sees 50bp of cuts this year, with a range of 0 (SocGen) to 100bp (MUFG) in cuts.
  • For 2025, the general expectation is that the Fed will cut quarterly in 2025, though some see less (Deutsche/Rabobank, 50bp) or more (ABNAmro, 175bp; Scotia 150bp).
  • For June’s Dot Plot, there are no expectations that the Fed will keep the 2024 rate median at 4.6% (3 cuts). The overwhelming consensus is that it will show 4.9% (2 cuts), with upside risks of a 1 cut median – the latter of which is the base case for a handful of analysts.
  • Consensus is more split on the longer-run dot – our median of analysts’ expected medians is 2.7%, suggesting uncertainty over how much it will be raised at this meeting beyond March’s 2.56%. Some see 2.625% this time, some 2.75%, some higher, with many seeing it raised further yet over coming quarters.
  • Most analysts expect the new economic projections to raise the 2024 core and headline PCE inflation forecasts by 0.1 to 0.2pp, with GDP growth downgraded slightly, and little change to 2025-26 estimates.
  • There aren’t many changes expected to the FOMC statement, including on forward rate guidance.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK (ANALYST SECTION STARTS PG 23):

FedPrevJun2024 - With analysts.pdf




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  • Note to readers: This is an update to the MNI Fed preview published on Friday June 7. Please see Page 23-28 of this document for sell-side analysts' outlooks for the June 12 FOMC decision and future policy.

EXECUTIVE SUMMARY:

September In Focus

Sell-side Fed rate cut views continue to be pushed back as the June 2024 FOMC meeting approaches, now converging on September as the timing for the first cut. Ahead of March’s meeting, consensus was firmly on June.

  • There are still one or two expectations for a July cut, but otherwise it’s nearly unanimous that the first Fed cut will come in Sep or Dec. JPMorgan eyes November, with SocGen the most hawkish on this front, eyeing Q1 2025.
  • The median analyst sees 50bp of cuts this year, with a range of 0 (SocGen) to 100bp (MUFG) in cuts.
  • For 2025, the general expectation is that the Fed will cut quarterly in 2025, though some see less (Deutsche/Rabobank, 50bp) or more (ABNAmro, 175bp; Scotia 150bp).
  • For June’s Dot Plot, there are no expectations that the Fed will keep the 2024 rate median at 4.6% (3 cuts). The overwhelming consensus is that it will show 4.9% (2 cuts), with upside risks of a 1 cut median – the latter of which is the base case for a handful of analysts.
  • Consensus is more split on the longer-run dot – our median of analysts’ expected medians is 2.7%, suggesting uncertainty over how much it will be raised at this meeting beyond March’s 2.56%. Some see 2.625% this time, some 2.75%, some higher, with many seeing it raised further yet over coming quarters.
  • Most analysts expect the new economic projections to raise the 2024 core and headline PCE inflation forecasts by 0.1 to 0.2pp, with GDP growth downgraded slightly, and little change to 2025-26 estimates.
  • There aren’t many changes expected to the FOMC statement, including on forward rate guidance.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK (ANALYST SECTION STARTS PG 23):

FedPrevJun2024 - With analysts.pdf