Prior to Friday, most of the big banks on Wall Street were in agreement that the Federal Reserve would cut interest rates at some point this year, with September being the most likely option. However, after Friday's disappointing jobs report, the outlook has shifted, and more economists from the nation's biggest banks are now predicting multiple rate cuts this year.
Bank of America is forecasting quarter-point cuts in September and December. Citigroup and JPMorgan are anticipating half-point cuts in September and November, followed by another quarter-point cut in December. Meanwhile, Goldman Sachs is predicting quarter-point cuts in September, November, and December.
The change in predictions comes after the release of the jobs report, which showed weaker-than-expected job growth. This has raised concerns about the strength of the economy and has led many economists to believe that the Federal Reserve will need to take action to stimulate growth.
While the exact timing and size of the rate cuts are still uncertain, the consensus among major banks is leaning towards multiple cuts this year. Some are even suggesting that the Fed may kick off the rate cuts with a larger than previously anticipated half-point cut in September.
Overall, the economic landscape is evolving, and market watchers are closely monitoring the situation for any further developments or signals from the Federal Reserve. The upcoming months will be crucial in determining the extent of the rate cuts and their impact on the broader economy.
