Major banks have adjusted their forecasts for the trajectory of U.S. interest rates after last Friday's strong jobs report in the United States.
Bank of America ruled out any interest rate cuts in the near term, suggesting that the Federal Reserve's next move is more likely to be an interest rate hike. Previously, the bank had forecasted that the Fed would cut rates twice in 2025.
Meanwhile, Citigroup still anticipates five rate cuts but expects the first to occur in May.
On the other hand, Goldman Sachs reduced its forecast for the number of rate cuts from three to two following the release of the employment data.
Data released by the U.S. Bureau of Labor Statistics last Friday showed that the U.S. economy added 256,000 new jobs in December, far exceeding the forecasted 165,000 jobs and higher than the 212,000 jobs recorded in November.
The unemployment rate dropped to 4.1%, down from 4.2% in November. December marked the largest monthly job gain since March 2023.
