• Wed. May 29th, 2024

Expert Forecasts Fed’s Potential Rate Cuts in 2025: What It Means for the Economy and Inflation

BySamantha Jones

Mar 27, 2024
S&P Economist Predicts 5 Interest Rate Cuts in 2025 Due to Slowing US Economy

The Federal Reserve could potentially lower interest rates up to five times in 2025, according to Paul Gruenwald, the global chief economist at S&P Global Ratings. This prediction is based on the expectation of a slowing US economy and cooling inflation, which would mean a total decrease of 2 percentage points in interest rates.

Gruenwald believes that the US economy, which has been experiencing rapid growth, will eventually start to slow down. In an interview with Yahoo Finance, he suggested that the Fed could implement three rate cuts in 2024, followed by as many as five rate cuts in 2025. This forecast indicates a quicker pace of monetary easing compared to other economic predictions.

Despite some Wall Street analysts warning of prolonged high interest rates due to stubbornly high prices, Gruenwald’s forecast aligns with the expectation of Fed continuing to cut rates gradually. The unexpected acceleration of consumer prices in February and the potential for inflation to rise further this year present challenges, but could also provide opportunities for the Fed to intervene. If the labor market weakens significantly and unemployment rises, the Fed may need to cut rates more aggressively than currently anticipated.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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