Fitch Ratings has announced its interest rate forecasts for the US Federal Reserve (Fed). The organization’s chief economist Brian Coulton announced that they expect the Fed to make two interest rate cuts of 25 basis points in November and December. Coulton stated that this reduction would be “modest” compared to the Fed’s historical interest rate reduction cycles.
In the report, “With the interest rate cuts, we expect the Fed’s policy rate to fall to 4.5 percent by the end of the year, 3.5 percent by the end of 2025, and 3 percent in June 2026.” Coulton also said that they did not expect a significant deterioration in the US labor market, but that the Fed was taking precautions against a rise in the unemployment rate.
Stating that last week’s 50 basis point reduction was above estimates, the economist drew attention to Fed Chairman Jerome Powell’s warning that risks in the labor market could increase unexpectedly.
Source: www.dunya.com
