đ Federal Reserve Signals Possible Interest Rate Cuts by End of 2025
The latest Federal Reserve meeting minutes hint at a potential shift in monetary policy that could bring interest rate cuts before the end of the year. According to BlockBeats, option pricing now suggests a mildly lower baseline policy path, opening the door for one to two rate cuts, each around 25 basis points. This projection marks a slight adjustment from the expectations set during the March FOMC meeting.
Whatâs catching attention is the leftward shift in the probability distribution for year-end interest ratesâpointing to rising downside risks in the Fedâs policy outlook.
On the other hand, the futures market is pricing in a more aggressive rate-cut scenario, implying up to three rate reductions by yearâs end. This reflects growing market sentiment that the Fed may need to act faster in response to evolving economic conditions.
Despite these movements, survey-based forecasts show relatively stable expectations, with most analysts still anticipating two to three cuts. However, diverging opinions among experts indicate uncertainty about the Fedâs next move.
đ Key Takeaway:
The stage is set for a potential easing cycle, but the path forward remains uncertain â all eyes on the Fed.
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