Wall Street sees 'slower' pace of Fed rate cuts in 2025


 ðŸ–Š️ Markets widely expect the Federal Reserve to cut interest rates for the third time this year at its December meeting. The question is what the central bank will do next year.

Recent sticky inflation prints and evidence the US economy is growing at a solid pace have raised doubts that the Fed will bring down rates as quickly as it previously indicated. In September, the Fed's Summary of Economic Projections (SEP) projected four interest rate cuts next year.

Markets are currently projecting roughly two cuts in 2025, per Bloomberg data. The Fed is scheduled to release an updated forecast on Dec. 18.

While they differ on the specifics, Wall Street economists generally agree that the central bank's current rapid pace of rate cuts won't continue.

"As we head into 2025, we're likely to see a slower pace of cutting going forward, where the Fed likely moves to an every other meeting sort of pace," Wells Fargo senior economist Sarah House, whose team sees three interest rate cuts in 2025, said during a media roundtable on Nov. 21.

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