Economist: The Fed's rate cut in 2025 may exceed market expectations

Economists at Paidenreiger Asset Management said in a report on the economic outlook that the Federal Reserve could cut interest rates more than the market expects in 2025 as inflation falls and unemployment rises. They said the Fed's preferred core inflation measure could fall below 2% sometime in 2025, while the U.S. unemployment rate could reach 4.4% or higher by the end of 2025. They also said the Fed could "easily" cut interest rates by more than the 35 basis point cut in 2025 currently expected by U.S. money markets. The optimal level of the federal funds rate would be 3.3%, which would mean at least four rate cuts in 2025. (Jinshi)