TechFlow news, on December 27, according to Jinshi News, economists from Payden & Rygel Asset Management stated in a report on the economic outlook that as inflation declines and unemployment rises, the Federal Reserve's rate cuts in 2025 could exceed market expectations.
They said the Fed's preferred core inflation measure might fall below 2% at some point in 2025, while the U.S. unemployment rate could reach 4.4% or higher by the end of that year. They also indicated it would be "a breeze" for the Fed to cut interest rates by more than the currently priced-in 35 basis points expected in money markets for 2025. The optimal level for the federal funds rate would be 3.3%, implying at least four rate cuts during 2025.
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