NOVEMBER 25, 2024 – WHERE WILL RATES GO IN 2025
The Fed’s last meeting of 2024 will take place on December 17-18. In the last few days, futures traders have become less certain there will be a rate cut, after it was a near certainty the week before. They are also pricing in three quarter-percent reductions in 2025, lower than previous projections indicated.
Fed Governor Michelle Bowman said last week that progress on inflation has stalled, this even before the effects of new Trump policies will bring. Both groups want interest rates to be neutral, but their definitions of that differ.
The Fed doesn’t want to lower rates too quickly, just to see inflation take off and have to raise them again. Rate reductions will likely happen in 2025, just not as quickly as people hope.