Guggenheim: The Federal Reserve will cut interest rates roughly once per quarter this year, potentially totaling up to 100 basis points.

Guggenheim Partners' Chief Investment Officer Anne Walsh said to foreign media at the beginning of the Davos World Economic Forum annual meeting on Monday that the Federal Reserve may lower interest rates once every quarter by 2025, with a total decrease of around 75 basis points this year, possibly even a full percentage point. She also stated that the Fed will continue to lower rates, although the pace may be slower than expected. Over the past few days, traders' bets on Fed interest rate cuts for this year have shifted from at least three cuts a month ago to only one cut, with the possibility of a second cut still uncertain. Walsh said that as long as the US dollar remains strong as a reserve currency, the US will continue to attract capital, and the tariffs expected to be imposed by the incoming president Donald Trump may not be as severe as most expect. She predicted that the average increase in tariffs will not exceed 10% and will be set for different countries. After a bull market until 2022, the bond market has been in a range-trading state for the third year in a row, and the fluctuations within the range make it interesting, Walsh said. She stated, "If the yield on 10-year US Treasury bonds reaches 5%, that would be too extreme, it's an oversold position and a complete buying opportunity." She added that bond yield spreads may continue to remain at lower levels, which is also beneficial for US stocks. She predicted that positive global themes such as artificial intelligence (AI), energy, and reshoring of manufacturing to the US will further boost US stocks this year, with the S&P 500 index expected to return 8%-10% by the end of 2025. Walsh said that there is uncertainty surrounding Trump's policies and the policies that the incoming government will actually implement, and the extent of the slowdown in the US economy may exceed current expectations. She stated, "The contradictions between politics and policies are like playing ping pong... this will bring significant volatility to our investment themes this year."