Wall Street sees 'slower' pace of Fed rate cuts in 2025
Published On Nov 29, 2024, 5:00 AM
Wall Street economists are expecting a slower pace of interest rate cuts by the Federal Reserve in 2025. While the Fed is projected to implement two rate cuts next year, concerns over stubborn inflation and solid US economic growth suggest that further cuts may occur less frequently than previously anticipated. Some economists predict that the Fed will move to a schedule of cutting rates every other meeting instead of more rapidly. The uncertainty around upcoming government policies also adds to the complexities of inflation management and interest rate decisions.
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Given the expectation of slower rate cuts, financial services companies might see a benefit as their lending margins could improve amidst higher interest rates. Conversely, sectors sensitive to interest rate changes, such as real estate and utilities, may face challenges due to potentially restrained borrowing costs. The overall economic outlook suggests stability, which may favor investments in growth-oriented stocks.
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