Institutions: The market pricing for the Federal Reserve's interest rate cuts in 2025 seems reasonable

Allspring Global Investments' Senior Portfolio Manager Noah Weiss stated that the market's expectation for the Federal Reserve to cut rates three to four times in 2025 and five to six times by July 2026 is reasonable. "Not because it's our expectation, but because it strikes a subtle balance between two distinctly different yet highly possible scenarios." In the first scenario, inflation remains high, and the economy avoids recession, meaning the Fed will cut rates more slowly than the market currently anticipates. The other scenario involves an economic downturn with falling inflation, potentially leading to five to six rate cuts by the end of 2025 and eight or more by July 2026, depending on the severity of the recession.