Key Takeaways
- Barclays has significantly revised its forecast for Federal Reserve interest rate cuts in 2025, now projecting three 25-basis-point reductions in September, October, and December.
- Macquarie anticipates two 25-basis-point rate cuts from the Federal Reserve in 2025, with expectations for reductions in September and December.
- Both prominent financial institutions foresee the Federal Reserve initiating its easing cycle in September 2025, signaling a notable shift in monetary policy.
Major financial institutions Barclays and Macquarie have recently updated their forecasts for the Federal Reserve's interest rate trajectory in 2025, with both now anticipating the central bank to begin cutting rates in September. These revisions underscore evolving market expectations regarding the pace and timing of monetary policy adjustments.
Barclays has notably increased its prediction for Fed rate cuts this year, now expecting three 25-basis-point reductions. The bank's updated outlook points to cuts occurring in September, October, and December 2025. This represents an upward revision from Barclays' previous forecast, which had anticipated only two 25-basis-point cuts in September and December.
Meanwhile, Macquarie has also adjusted its expectations for Federal Reserve policy. The firm now forecasts two 25-basis-point interest rate cuts in 2025, specifically in September and December. This revised outlook from Macquarie indicates a shift from its prior forecast of a single cut in September.
The consensus among these leading banks for a September rate cut suggests growing confidence in the Federal Reserve's readiness to ease monetary policy later this year. Analysts are closely monitoring incoming economic data, particularly inflation and employment figures, for further cues on the Fed's decision-making process. The anticipated rate cuts could provide a boost to economic activity and offer relief to borrowers.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.