S&P Economist Predicts 5 Interest Rate Cuts in 2025 Due to Slowing US Economy

In a recent interview with Yahoo Finance, Paul Gruenwald, the global chief economist at S&P Global Ratings, predicted that the US Federal Reserve could potentially lower interest rates up to five times in 2025. This forecast is based on the expectation of a slowing US economy and cooling inflation, which would result in a total decrease of 2 percentage points in interest rates.

Gruenwald believes that despite productivity and investment in the US remaining strong this year, the economy will inevitably slow down. He projects that as growth starts to decline in the second half of the year, the Fed will gradually lower interest rates. The aim is to maintain a “slower-for-longer” approach as the economy recalibrates.

Despite some Wall Street analysts warning of prolonged high interest rates due to stubbornly high prices, Gruenwald’s forecast aligns with the expectation of Fed continuing to cut rates gradually. The unexpected acceleration of consumer prices in February and the potential for inflation to rise further this year present challenges, but could also provide opportunities for the Fed to intervene. If

By Samantha Johnson

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