Wall Street Consensus: The Federal Reserve will slow down interest rate cuts in 2025.

After the results of the US presidential election were announced, global assets showed significant volatility. In the short term, US Treasury yields and the US dollar index rose, while gold and oil prices fluctuated. In the long term, the market will pay more attention to the fundamentals of the US economy and the monetary policy of the Federal Reserve. Looking ahead to the Federal Reserve's policy path next year, most investment banks believe that the Federal Reserve will continue to maintain its current gradual policy path, gradually adjusting interest rates to respond to economic changes. Specifically, investment banks forecast that the Federal Reserve may slow down the pace of rate cuts in 2025, and may even pause rate cuts in certain situations. According to the latest news on November 16th, Richmond Federal Reserve President Barkin said in an interview on November 15th that he expects inflation to continue to cool until 2025, hinting that the Federal Reserve may decide to slow down the pace of rate cuts. Several institutions have begun to reduce their bets on the possibility of rate cuts by the Federal Reserve. Barclays: Predicted that the Federal Reserve will cut interest rates twice in 2025, down from the previous estimate of three times In a report, Barclays economists stated that considering the possibility of tightening immigration restrictions and raising import tariffs under the Trump administration, these policies may stimulate US inflation and change the Federal Reserve's monetary policy direction. Barclays chief US economist Marc Giannoni's team raised their forecast for US inflation next year and lowered their GDP expectations. They predict that the number of rate cuts by the Federal Reserve in 2025 will decrease from the previous forecast of 3 times to 2 times, each time by 25 basis points. Barclays Bank's foreign exchange and emerging markets macro strategist Zhang Meng pointed out that a slower rate cut pace by the Federal Reserve may put greater pressure on Asian currencies, especially for central banks in Asian countries/regions that rely on Fed policy guidance. Despite the Fed's rate cuts, Asian currencies still face depreciation pressure due to the strength of the US dollar. Central banks in these countries/regions may need to delay their rate cut plans and may need to implement larger rate cuts at some point in the future to address economic conditions. Goldman Sachs: May want to take more cautious action Goldman Sachs economists, led by Jan Hatzius, believe that the Federal Reserve "may want to take more cautious action to ensure they find the right end point on the rate-cutting path." Currently, Goldman's forecast is to cut rates by 25 basis points at each meeting before March 2025, and then make the final rate cut in June and September 2025. JP Morgan: Quarterly rate cuts starting in March 2025 JP Morgan predicts that due to the "uncertainty of Trump administration policies," the Federal Reserve will change from cutting rates at every meeting in 2025 to cutting rates once every quarter starting in March, until the federal funds rate reaches 3.5%. Economist Michael Feroli stated in his report that he expects the Federal Reserve to cut rates by 25 basis points in December and continue to cut rates quarterly from March 2025, until the federal funds rate reaches 3.5%. He also mentioned that Trump's ability to reshape the Fed may take time to gradually implement. Nomura Securities: Adjust the number of rate cuts by the Federal Reserve in 2025 from 4 times to 1 time Nomura Securities economists expect the Federal Reserve to cut rates only once in 2025 and raise the terminal rate forecast by 50 basis points to 3.625%. This adjustment reflects market concerns about Trump's ability to fulfill his promises of increasing tariffs, and is expected to significantly push up inflation in the short term and lead to a moderate slowdown in economic growth. Previously, Nomura economists had predicted four rate cuts by the Federal Reserve in 2025. Credit Suisse: Pausing rate cuts Credit Suisse believes that the Federal Reserve will keep rates unchanged from January to July 2025, giving FOMC officials time to assess the impact of Trump's new policies, and then, if there is a slowdown in the economy, resume rate cuts. Credit Suisse analysts, like Oscar Munoz, wrote in their report: "Although some investors may expect the Fed to even begin raising rates in this scenario, we expect the Fed to pause rate cuts while assessing the impact of these factors on inflation and economic growth." Deutsche Bank: The Federal Reserve may slow down or pause rate cuts Deutsche Bank's Chief US Economist, Matthew Luzzetti, commented that the outcome of the Trump election increased the prospects for economic growth, rising inflation, and improved labor market conditions, increasing the possibility of the Federal Reserve abandoning rate cuts in December. Matthew Luzzetti pointed out that from a risk management perspective, this may provide a strong reason for the Federal Reserve to skip that meeting (action). This article is selected from "Wind Information", GMTEight editor: Zhang Jinliang.