The United States Federal Reserve's latest economic projection, released on Wednesday, indicates that policymakers expect to cut interest rates by 50 bps in 2025, bringing the federal funds rate to a range of 3.75% to 4%. Estimates for next year envisage the rate at the range of 3.25% to 3.5%.
The institution forecasted that unemployment would be 4.4%, one percentage point higher than in December. Meanwhile, inflation remains a concern, with personal consumption expenditures (PCE) inflation projected at 2.7% for 2025 and declining to 2.2% in 2026.
Core PCE, which excludes food and energy, is expected at 2.8% this year before easing to 2.2% next year.
