Major Banks Share Their Latest Forecasts Regarding the Fed’s Interest Rate Decision Tomorrow

Ahead of the FED's critical interest rate decision, which will be announced tomorrow at 22:00 Türkiye time, the projections of the world's leading investment banks have become clear.

While most banks anticipate a 25 basis point interest rate cut, they agree that the decision text will carry a hawkish tone. Below are highlights of the institutions' detailed expectations.

Morgan Stanley expects the federal funds rate to fall to the 3.0%-3.25% range, anticipating interest rate cuts in December, January, and April. The bank expects tomorrow's statement to strongly signal that the “risk management reductions have been completed.” It anticipates a few members will vote against it, but the dot plots will remain unchanged.

JPMorgan also describes the decision as a “hawkish cut.” Expecting the announcement to signal smaller cuts in the future, the bank is projecting dot plot projections of 3.4% for 2026 and 3.1% for 2027. According to JPMorgan, the next and final cut could occur in January.

Bank of America (BofA) says it expects additional balance sheet actions in addition to the 25 basis point cut. BofA anticipates a tone in the statement that will make future cuts more difficult. It anticipates that approximately three Fed members may dissent, with further cuts expected in June and July.

Deutsche Bank argues that the Fed will be cautious about further cuts due to stronger growth and sticky inflation. The statement will shift to a more hawkish tone, with the dot plot expected to take shape at 3.4% (2026) and 3.1% (2028). The next cut is in September.

UBS predicts a majority of members will support the 25 basis point cut. The bank, which says the risk assessment may shift to a more balanced tone, expects at least two dissenting votes, particularly from Musalem and Schmid. According to UBS, inflation forecasts may be revised down slightly, and Powell will emphasize the data-dependent theme by stating that they are “closer to neutral.”

Commerzbank expects a 25 basis point cut, but it believes there could be numerous counter-threats. The bank believes Powell will balance the cut with hawkish communication, and predicts only one more cut before Powell's term ends, with a stronger easing cycle starting in June with the new chairman.

Goldman Sachs supports the rate cut due to the softening labor market. The bank says the announcement will signal a “higher benchmark for future rate cuts,” and expects growth forecasts to be revised upwards and inflation forecasts to be revised down slightly.

Citi, for its part, is again calling the decision a “hawkish cut.” The bank, which doesn’t expect major changes to the dot plots, says Powell won’t completely rule out January or March cuts but will specifically avoid a dovish stance.

Wells Fargo believes the Fed will continue to move toward a more neutral stance. The bank's dot plot projections are 3.4% (2026), 3.1% (2027–28), and 3.0% long-term. In its statement, Wells Fargo notes that three or four counter-throws are possible, and that guidance may come in a softer tone, with interest rate cuts likely to continue by 25 basis points each in the first and second quarters (Q1–Q2).