Citi: The US economic outlook next year is not ideal, and the Federal Reserve is expected to cut interest rates aggressively
According to the news from Mars Finance, the team of Citigroup economists led by Andrew Hollenhorst forecasts that in 2025, U.S. companies will shift from reducing hiring to complete layoffs. This, in turn, will lead to a decline in consumer spending and business investment. At the same time, they expect that a loose labor market will alleviate inflationary pressures in the service sector, and the weak global situation will suppress commodity prices. This will lead the Federal Reserve to take aggressive action - it is expected to cut rates by 25 basis points at each meeting before July next year, bringing the federal funds rate to between 3% and 3.25%. This is much lower than the market expectation, which expects the federal funds rate to reach around 4% by then.
