11h05 ▪
3
min read ▪ by
The American Federal Reserve (FED) may slow down its cycle of interest rate cuts in 2025, according to recent statements by its officials. An announcement that sent panic across Wall Street, where stock indices fell heavily on Friday, shaken by robust economic data! Reinforcing the idea that the FED might curb its monetary easing sooner than expected.
FED: Toward a slowdown in rate cuts in 2025?
Last December, the American Federal Reserve (FED) lowered its key rate for the third consecutive time, setting it in a range of 4.25% to 4.50%. This reduction, however, could be the last one for some time. Michelle Bowman, a governor of the FED, recently stated that this cut represented a final step in the recalibration of rates.
Meanwhile, Wall Street finished lower on Friday, with declines of 1.63% for the Dow Jones and the Nasdaq, while the S&P 500 lost 1.54%. These performances were affected by robust economic data: in December, 256,000 jobs were created, a figure exceeding expectations, while the unemployment rate dropped to 4.1%.
These indicators confirm the strength of the American economy and suggest that the job market remains solid. In this context, the FED may slow the pace of its rate cuts in 2025, in order to focus its efforts on its inflation target of 2%, still distant from current forecasts of 2.5% for 2025.
What direction will the Federal Reserve take in its next decisions?
The situation remains complex for the FED, which must juggle between persistently high inflation and a growing economy. Some analysts believe that a rate hike may be necessary if inflation starts to rise again, while others foresee a stabilization of rates to avoid disruptions in the markets.
Thus, the FED seems to be heading toward a pause in its rate-cutting cycle, preferring to observe the evolution of the economy before taking new measures. This caution could have significant impacts on financial markets and the American economy in the coming months, making future statements from the central bank crucial for investors.
Maximize your Cointribune experience with our “Read to Earn” program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
Le monde évolue et l’adaptation est la meilleure arme pour survivre dans cet univers ondoyant. Community manager crypto à la base, je m’intéresse à tout ce qui touche de près ou de loin à la blockchain et ses dérivés. Dans l’optique de partager mon expérience et de faire connaître un domaine qui me passionne, rien de mieux que de rédiger des articles informatifs et décontractés à la fois.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
