Canadian Association for Business Economics: Fed needs to cut rates by more than 50 basis points next year
According to the report from Gold Ten, the Federal Reserve's median forecast for interest rates in 2025 is only a 50-basis-point rate cut, but the Business Council of Canada (BCA) expects more rate cuts. BCA analysts said in a report that inflation is likely to be lower than the Federal Reserve's 2025 forecast, and the unemployment rate may be higher than the Federal Reserve's 2025 forecast.
They stated: "Therefore, more than 50 basis points of easing will be needed." The Federal Reserve forecasts the unemployment rate to be 4.3% by the end of 2025, "which requires a significant improvement in the momentum of the labor market, and we believe this trend reversal is unlikely to occur."
