Most previews written after last Thursday’s media reports that the FOMC faced a “close call” between 25 and 50 acknowledge risk of the bigger cut, analysts for the most part retained their previous base case of a 25bp reduction.
- The vast majority of analysts expect a total of 75bp of cuts this year (range of 50bp to 125bp) including September’s decision, with between 25 and 175bp of cuts in 2025.
- For the Dot Plot, the expectation by almost all analysts is for the FOMC to pencil in a 4.6% rate median for 2024 (ie 75bp of 2024 cuts), though this depends in part on the size of this meeting’s cut – nobody sees a median higher than 4.6% though some see a 4.4% median.
- For end-2025, there is a much wider dispersion of expectations, with a range of 2.9% to 3.6%, with most eyeing 3.1% or 3.4%. 2026 and 2027 are seen to reflect rates of around 3.0%, while the longer-run median of 2.8% is largely seen to remain unchanged.
Note to readers: This update of our Sep 13 preview includes analyst expectations (Starting Page 25). FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:
FedPrevSep2024 - With Analysts.pdf
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