Finance
Morgan Stanley, Deutsche Bank expect three US interest rate cuts this year
Published by Global Banking and Finance Review
Posted on September 12, 2025
Global Banking and Finance Review
Company
Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
Published by Global Banking and Finance Review
Posted on September 12, 2025
By Joel Jose and Akriti Shah
(Reuters) - Morgan Stanley and Deutsche Bank expect the U.S. Federal Reserve to deliver interest rate cuts at all its three meetings this year, following data this week showing more modest inflation pressures.
The two brokerages in separate notes said on Friday they now expect the Fed to cut rates by 25 basis points at each of its remaining meetings in September, October and December.
The firms previously forecast one 25-basis-point cut each in September and December.
The Fed is widely expected to kick off a new easing cycle in next week's policy meeting - its first since the 25-bps rate cut in December 2024 - after recent data pointed to a slowdown in the job market.
Last month, Fed Chair Jerome Powell signaled a rate cut was possible at the September 16-17 policy meeting, citing rising labor market risks, while cautioning that inflation remained a threat.
Morgan Stanley said market conditions give the Fed room to move more quickly toward a neutral policy stance.
According to the Wall Street brokerage, the Fed is likely to deliver four back-to-back 25-bps rate cuts starting next week and continuing through January, with two further cuts projected for April and July 2026.
"While we currently do not have additional rate cuts in our forecast for next year, given that our inflation and labor market forecasts are inconsistent with rates below neutral, risks are skewed towards more reductions in 2026," said Matthew Luzzetti, chief U.S. economist at Deutsche Bank.
Traders have priced in a 95% chance of a 25-bps rate cut next week, according the CME FedWatch Tool, with a slim 5% chance of a deeper 50-bps cut.
After a soft August labor print, Standard Chartered emerged as the only brokerage predicting a 50-bps rate cut by the Fed this month, diverging from the broader consensus.
(Reporting by Joel Jose and Akriti Shah in Bengaluru; Editing by Maju Samuel)