Factbox-Brokerages shift Fed rate-cut expectations to September after consumer price data

(Reuters) -Several global brokerages have pushed back their expectations of the U.S. Federal Reserve starting to lower interest rates to September from June following a bigger-than-expected rise in March consumer prices, with some seeing a cut only in December.

The consumer price index (CPI) rose 0.4% last month and increased 3.5% on an annual basis. That compared with expectations of 0.3% gain on the month and 3.4% on a year-on-year basis, according to a poll of economists by Reuters.

The report comes after a stronger-than-expected jobs data in March, as well as a drop in the unemployment rate to 3.8% from 3.9% in February.

Markets are now pricing in a 19.4% chance of the Fed cutting rates in June, compared with 50% before the CPI data, according to CME FedWatch tool, while betting on a 44.4% chance for July and 67.8% for September.

Barclays, UBS Global Wealth Management, TD Securities, Wells Fargo are among brokerages shifting their view of the first rate cut to September, while Goldman Sachs, BNP Paribas (OTC:BNPQY) and Jefferies have pushed it to July from June.

Here are the forecasts from major brokerages following the March CPI data:

Brokerage First cut in Number of cuts Quantum (NASDAQ:QMCO) of cuts in Fed funds target

in 2024 2024 rate at end 2024

Goldman Sachs July 2 - -

J.P. Morgan July - - -

BofA Global Research 1 25 bps -

December

Barclays September (25 bps) 1 25 bps 5.00-5.25%

UBS Global Wealth Management * September (25 bps) 2 50 bps 4.75-5.00%

TD Securities September (25 bps) 2 50 bps 4.75-5.00%

Wells Fargo September (25 bps) 3 75 bps 4.50-4.75%

Standard Chartered (OTC:SCBFF) Q3 (most likely 2 50 bps 4.75-5.00%

July)

RBC Capital Markets December (25 bps) 1 25 bps 5.00-5.25%

Jefferies July - - -

BNP Paribas July 2 - -

HSBC June 3 75 bps

4.50-4.75%

Deutsche Bank December 1 - -

Macquarie December 1 25 bps

5.00-5.25%

Citigroup June - - -

Here are the forecasts from major brokerages before March CPI data:

Brokerage First cut in Number of cuts Quantum of cuts Fed funds target

in 2024 in 2024 rate at end 2024

Goldman Sachs June (25 bps) 3 75 bps 4.63%

J.P. Morgan June (25bps) 3 75 bps 4.50-4.75%

BofA Global Research June 3

Deutsche Bank June 100 bps 4.25-4.50%

UBS Global Wealth June (25 bps) 3 75 bps 4.50-4.75%

Management *

UBS Global Research * June (25 bps) 3 75 bps 4.50-4.75%

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Morgan Stanley June (25 bps) 4 100 bps 4.38%

* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group