DWS: The prediction for the number of interest rate cuts by the Federal Reserve before the end of next year has been lowered to 3 times.

DWS Chief US Economist Christian Scherrmann stated that recent economic data in the United States has been mixed, with the labor market appearing to trend towards weakness while inflation remains stubborn. Despite this, DWS believes that progress has been made in controlling inflation and there is still a chance for further interest rate cuts. DWS has revised its forecast for rate cuts before the end of 2025 from 5 to 3 (including one in December) and expects the central bank to slow down the pace of rate cuts after the December meeting. In terms of timing, the bank anticipates that the Federal Reserve may switch to adjusting rates quarterly in the first half of 2025 and then pause the normalization of interest rate policy in the second half of the year. Additionally, DWS stated that future fiscal and trade policies remain major unknown factors. Federal Reserve Chairman Powell explicitly stated in the last meeting not to make excessive assumptions or expectations, but DWS believes that at least the extension of provisions from the "Tax Cuts and Jobs Act" should be included in future outlook considerations. Unlike other policy proposals (such as tax cuts, tariffs, or immigration), lawmakers seem to have reached a consensus on extending existing stimulus measures. As a result, households and businesses may anticipate stronger domestic demand, leading to increased hiring or sustaining current levels of consumption. DWS believes that the Federal Reserve will signal the need for more time to lower rates to neutral levels (expected to be between 3 and 3.5%). Therefore, the bank expects that the upcoming economic forecast summary will show continued strong economic growth in 2025, but with fewer rate cuts and slight inflation increase.