Wall Street banks expect 'hawkish pause' from Fed in June

Most big Wall Street banks expect the Federal Reserve to keep interest rates unchanged on Wednesday, while sticking to its hawkish tone due to a strong job market and elevated inflation.

Several economists say that it is a toss-up between a skip and a hike in the June meeting. Most banks expect the central bank to prepare markets for a hike in July.

Money markets are currently pricing in a more than 70% chance of a pause this month, with rate cut expectations pushed out to next year.

Following are forecasts from some big U.S. banks and their global counterparts:

Brokerage June Expectation July Expectation Terminal rate

Name expectations

Citigroup (NYSE:C) 25 bps hike 25 bps hike 5.5% - 5.75%

HSBC 25 bps hike 5.25% - 5.50%

UBS Pause 25 bps hike 5.25% - 5.50%

Deutsche Pause See Fed raising rates one 5.30%

Bank more time in July

Goldman Pause 25 bps hike 5.25% - 5.50%

Sachs

Barclays (LON:BARC) Pause Expects 50 bps of hikes

through September; expects Fed

to signal a hike in July

J.P.Morgan Pause No hike 5% - 5.25%

Morgan Pause No hike 5% - 5.25%

Stanley

BofA Pause Sees a July hike as "highly 5% - 5.25%

probable"

Wells Fargo (NYSE:WFC) Pause No hike 5% - 5.25%

Nomura Pause