Federal Reserve Expected to Initiate Rate Cuts Amid Economic Concerns

According to PANews, Credit Mutuel Asset Management strategist Francois Rimeu anticipates that the Federal Reserve may begin a cycle of interest rate cuts this week, potentially extending until 2027. Rimeu suggests that the weakening economic activity and labor market necessitate more substantial monetary easing, predicting that the terminal rate will decrease to 3.1% by 2027, aligning closely with the long-term rate of 3%. The institution forecasts a 25 basis point rate cut this week, with another reduction expected later this year, followed by two additional cuts in 2026. Rates may stabilize in 2028. Data from the London Stock Exchange Group indicates that the U.S. money market currently expects nearly six rate cuts by the end of next year.