International investment banks look ahead to the Fed's interest rate cuts.

Prior to the FOMC meeting on September 17, several international investment banks updated their forecasts for the Fed's policy: 1. UBS: It is expected that the Fed will cut interest rates four times starting in September, with a total decrease of 100 basis points, due to inflation nearing target and increased risks in the labor market. 2. Goldman Sachs: It is expected that the Fed will cut interest rates by 25 basis points in September, October, and December this year, with two more cuts in 2025, lowering rates to 3%-3.25%; if the labor market deteriorates rapidly, a 50 basis point cut at the next meeting is not ruled out. Goldman Sachs emphasized that the weak job market has become the focus of policy, and inflation is no longer the main reason hindering rate cuts. 3. Morgan Stanley: It is expected that the remaining three meetings this year will see interest rate cuts of 25 basis points each, with an additional rate cut in October compared to previous predictions. 4. Barclays: It is expected that interest rates will be cut by 25 basis points in September, October, and December, with additional cuts in 2026 and 2027. 5. J.P. Morgan: The probability of a "dovish 25 basis point rate cut" is the highest, with the S&P 500 potentially immediately rising by 1%; if accompanied by hawkish comments, U.S. stocks may remain stable or slightly decline; the probability of no change is only 4%, which could lead to the S&P 500 falling to 6450 points; the probability of a 50 basis point rate cut is 7.5%, which could lead to market volatility. J.P. Morgan Asset Management strategist David Kelly warned that the current market is becoming bubbly, and loose policies may have unintended consequences. 6. Deutsche Bank: Chief economist Luzzetti said that the Fed will cut rates in three increments of 25 basis points each; at this FOMC meeting, it may see the first time since 1988 that three board members cast dissenting votes. 7. Citi Wealth: It is expected that the Fed will cut rates by 25 basis points at the next meeting, but has not committed to a fixed rate path; future policies will depend on data. 8. CICC: It is expected that a 25 basis point rate cut will happen at the September 17 meeting, with the possibility of another cut in October. However, it is also warned that the upward risks of inflation and weakening employment may limit the space for rate cuts. CICC emphasized the risk of "stagflation," where economic growth slows down while inflation remains a threat. 9. Nomura Securities: It is expected that interest rates will be cut by 25 basis points starting in September, followed by additional cuts in December and March 2026, totaling at least three small rate cuts. Nomura believes that the slowdown in the labor market and mild inflation are the main reasons for the early expectations of rate cuts. Consensus: A 25 basis point rate cut tonight is almost certain. Divergence: Goldman Sachs/UBS are betting more aggressively, while CICC warns of limited policy space for the Fed.