• Mon. May 20th, 2024

S&P Global Ratings’ Chief Economist Predicts US Rate Cuts in 2024 and 2025 Amid Inflation Concerns

BySamantha Nguyen

Mar 28, 2024
Chief Economist Predicts 5 Rate Cuts in 2025 as US Economy Expected to Slow, Says the Fed

S&P Global Ratings’ global chief economist, Paul Gruenwald, has predicted that the US economy will slow down in the coming years, leading to multiple rate cuts by the Federal Reserve. Gruenwald anticipates three rate cuts in 2024, followed by possibly up to five rate cuts in 2025, totaling a two percentage point reduction in interest rates over 21 months.

According to Gruenwald, despite seeing a surge in productivity and investment this year, the US economy’s current hot pace of growth is not sustainable in the long term. The Fed’s commitment to continuing supporting the economy amidst predictions that it could potentially cut rates five times in 2025 may be necessary to counter rising inflation and bring it back to the target of 2%.

Gruenwald believes that while there are risks that could affect this forecast, such as a significant downturn in the labor market leading to higher unemployment, he remains cautious in his prediction of the Fed’s rate-cutting strategy. This outlook contrasts with some Wall Street analysts who are warning that rates may remain elevated for longer due to persistent high prices.

In light of unexpected inflation acceleration in recent months, economists are closely monitoring inflation levels and the potential impact of the stock market on financial conditions. However, overall sentiment remains that the Fed will likely continue its path of gradual rate cuts based on economic indicators and inflation trends.

By Samantha Nguyen

As a content writer at newsskio.com, I weave words to craft compelling narratives that captivate readers and bring stories to life. With a keen eye for detail and a passion for storytelling, I strive to create engaging and informative content that resonates with our audience. Whether I'm delving into the latest news trends or exploring unique angles on various topics, my goal is to deliver quality content that informs, entertains, and inspires. Join me on this journey as we uncover the news stories that matter most.

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