The Fed could be on the verge of ripping up its rate script for 2025

Published On Dec 16, 2024, 4:00 AM

Investors are currently focused on the Federal Reserve's upcoming decision regarding interest rates. Although a rate cut is widely anticipated for December 2024, uncertainty looms for 2025, as previous predictions for multiple cuts next year from the Fed may be re-evaluated due to ongoing inflation concerns and a resilient job market. Some economists predict a reduction in expected rate cuts from four to potentially two or three in 2025, depending on economic indicators.

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With the Fed likely to maintain a more cautious stance on future rate cuts, especially in light of persistent inflation, investors may see some volatility in financial markets. Specifically, sectors sensitive to interest rates, like real estate and financials, could react negatively if the projected cuts are lowered or delayed.

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