The Fed is sounding more hawkish. Those voices may get louder in 2025.

Published On Dec 19, 2024, 2:08 PM

The Federal Reserve appears to be taking a more hawkish stance on interest rates as it anticipates stubborn inflation could hinder future rate cuts. With a new group of policymakers set to join the Fed's decision-making committee in 2025, expectations are that they may advocate for fewer cuts than previously projected. Although the Fed recently lowered rates for the third consecutive meeting, officials adjusted their forecast for future cuts from four to two due to lingering inflation, which is now expected to stabilize at 2.5% next year. This shift in tone indicates a more cautious monetary policy ahead.