Economist: U.S. unemployment rate may reach 4.4% or higher by the end of 2025, and rate cuts may exceed market expectations
On December 27, economists at Patton Riegel Asset Management said in a report on the economic outlook that the U.S. Federal Reserve may cut interest rates more than the market expects in 2025 as inflation falls and unemployment rises. They said the Fed's favored core inflation gauge could fall below 2% sometime in 2025, while the U.S. unemployment rate could reach 4.4% or higher by the end of 2025. They also said the Fed could 'easily' cut interest rates by more than the 35 basis point drop in 2025 that the US money market currently expects. The optimal level for the federal funds rate would be 3.3%, which would mean at least four rate cuts in 2025.
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