Major banks have revised their Fed interest rate forecasts, signaling a shift in monetary policy expectations for 2025. Journalist Nick Timiraos summarized the updates, noting that the consensus among leading financial institutions has shifted away from their previous aggressive rate cut forecasts.

• Goldman Sachs: Foresees two rate cuts in 2025, one in June and one in December, and cancels the cut previously planned in March.
• JPMorgan Chase: Similarly, it is abandoning the March discount and expecting discounts in June and September.
• Bank of America (BofA): Declares the end of the discount cycle and predicts a long wait. BofA suggests the next rate move is more likely to be an increase than a decrease.
• Barclays: Abandoning its March forecast, it now sees only one rate cut in June this year.
• RBC: March rate cut cancelled, reiterating views that the cut cycle may be complete.

Timiraos noted one important factor affecting these revisions: inflation expectations. A preliminary January University of Michigan survey showed that consumers’ inflation expectations for both one and five years ahead rose to 3.3%, the highest level in a year.

*This is not investment advice.