Best Investment Manager Predicts: U.S. Federal Reserve to Cut Rates by 25 Basis Points in November and December - Expert Analysis by Indradip Ghosh
In a snap Multibagger poll of over 100 economists, a strong majority believe that the Federal Reserve will cut the federal funds rate by 25 basis points in both November and December. This comes after the central bank started cutting rates with a half-percentage-point reduction to keep unemployment low and inflation easing back toward the 2% target.
While this week's half point cut was mostly expected, the latest survey suggests that the central bank will reach a neutral rate of interest by next year. Economists predict further cuts this year, with rates falling by another 50 basis points to a 4.25%-4.50% range.
Market expectations differ slightly from economists' projections, but overall, there is consensus on the direction of interest rates. The Fed is expected to deliver 50 basis points of cuts in the first quarter of 2025, followed by additional cuts in the following two quarters.
Analysis: The Fed's decision to cut rates will impact various aspects of the economy, including borrowing costs, investment returns, and overall economic growth. Individuals with loans tied to interest rates may see lower payments, while savers may experience reduced returns on investments. It is important for individuals to stay informed about these changes and consider how they may affect their financial decisions moving forward.