Economists Predict Greater Than Expected Fed Rate Cuts By 2025

According to BlockBeats, economists from Paden Riegel Asset Management have released a report on the economic outlook, suggesting that the U.S. Federal Reserve may implement larger interest rate cuts in 2025 than currently anticipated by the market. The report indicates that as inflation decreases and unemployment rises, the Fed's preferred core inflation measure could fall below 2% at some point in 2025. Additionally, the U.S. unemployment rate is projected to reach 4.4% or higher by the end of 2025. The economists believe that the Federal Reserve could easily lower rates beyond the 35 basis points reduction currently expected by the U.S. money market for 2025. They suggest that the optimal level for the federal funds rate would be 3.3%, implying at least four rate cuts in 2025.