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DWS: Fed Not In Hurry to Cut Rates; Future Fiscal & Trade Policies Still Key Unknowns
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Recent U.S. economic data has been mixed, said Christian Scherrmann, chief U.S. economist at DWS. Although the labor market appears to be waning amid volatility, inflation remains stubbornly high. Apart from this, future fiscal and trade policies remain major unknowns. Federal Reserve Chairman Jerome Powell made it clear at the last meeting that there should be no excessive assumptions or expectations. However, DWS opined that at least the extension of the provisions of the Tax Cuts and Jobs Act should be taken into account in the future outlook. The Federal Reserve will need a longer period of time to lower interest rates to neutral, expected to be between 3% and 3.5%, DWS viewed, therefore expecting the Fed's upcoming summary of economic projections to show continued strong economic growth in 2025, but fewer rate cuts and slightly higher inflation. DWS lowered its forecast for rate cuts by the end of 2025 from five to three. AAStocks Financial News |
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