(Reuters) – The large brokers, including Barclays, BNP Paribas and Deutsche Bank, are now counting on a drop in rates of the American federal reserve (Fed) of 25 base points in September, after the change of tone operated by the president of the Fed, Jerome Powell, during the symposium in Jackson Hole, where he has focused on the growing risks on the labor market.
“The risk -to -employment risks increases,” said the president of the Fed, warning that these risks could materialize quickly in the form of layoffs and an increase in unemployment.
In notes published Friday after the speech of Jerome Powell, Barclays said he is now counting on a drop in Fed rates in September while the bank previously provided for such a measure for September 2026, believing that the words of the central banker introduced “a softening bias”.
“Powell clearly indicated that the Fed intended to lower rates in September, unless the data indicates otherwise,” wrote economists from BNP Paribas. They now predict a drop in rates in September and December against a long -standing forecast of a status quo.
At the same time, Macquarie and Deutsche Bank revised their forecasts concerning a drop in September and December, respectively, to count on a drop of 25 base points for each of these two months.
Morgan Stanley and Bofa are the only two large Wall Street brokerage companies that do not yet provide a drop in September. Such a decision is likely if the data relating to employment and inflation confirm a new slowdown, nevertheless said Morgan Stanley.
According to the Fedwatch tool of the CME, the markets currently assess at 87% the probability of a rate drop of 25 base points at the September meeting, against 75% before the speech of Jerome Powell.
The Federal Open Market Committee (FOMC) must meet on September 16 and 17.
Goldman Sachs and JP Morgan, on the other hand, reaffirmed their forecasts of a drop in September, aligning the general public opinion that the lower data could justify a relaxation of monetary policy.
(Written by Rashika Singh in Bangalore, Mara Vîlcu for the , edited by Blandine Hénault)
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