Institution: There is little doubt that the Federal Reserve will cut interest rates twice in 2025

John Luke Tyner, head of fixed income at Aptus Capital Advisors, said that given the Fed's shift to focusing on the labor market and signs of easing price pressures, two more rate cuts by the Fed in 2025 are almost certain. However, the sustainability of this rate-cutting cycle will be questioned heading into 2026. The market expects the Fed to cut rates approximately three times in 2026, which would bring the federal funds rate down to around 3%. As the easing policy gradually transmits (with a time lag), we are concerned that economic growth could reaccelerate, while other factors, such as energy prices, could bottom out and then rise, potentially causing inflation data to bottom out again (or rebound). (Jinshi)