(Reuters) -Traders no longer expect a rate hike of 50 basis points by the U.S. Federal Reserve next week as the surprise collapse of lender Silicon Valley Bank rattles the financial system.
The current projection is for a 25 bps move, with some expecting no hike at all or even a cut.
That is a quick reversal in expectations after hawkish commentary from Fed Chair Jerome Powell had prompted traders to see a 70% chance of a 50 bps rate hike just a week earlier.
Following are rate expectations from major Wall Street banks:
Bank Current expectation Expectation before SVB
crisis
March hike Terminal March Terminal rate
(in bps) rate hike
(in
bps)
Goldman No hike 5.25% – 5.5% 25 5.5% – 5.75%
JPM 25 5% – 5.25% 25 5% – 5.25%
Citi 50 5.5% – 5.75% 50 5.5% – 5.75%
BofA 25 5.25% – 5.5% 25 5.25% – 5.5%
Morgan 25 5.12% 25 5.125%
Stanley
Barclays No hike 5.1% 50 5.25% – 5.5%
NatWest No hike N/A 50 N/A
Nomura 25 bp cut N/A 50 N/A
(Compiled by Susan Mathew in Bengaluru; Editing by Anil D’Silva and Sam Holmes)