HSBC predicts three Fed rate cuts by March 2025 due to high inflation

From Financial Modeling Prep: 2025-06-19 10:59:00

HSBC predicts the U.S. Federal Reserve will cut interest rates three times from September 2024 to March 2025 due to high inflation and economic uncertainty. The bank forecasts 25-basis-point cuts in September 2024, December 2024, and March 2025, bringing the federal funds rate to 3.50-3.75%.

Reasons for the Rate Cut Expectation include persistent inflation above the Fed’s 2% target, labor market risks, and Fed Chair Powell’s cautious approach. HSBC anticipates macro pressures and fiscal risks will prompt dovish action by early 2025, despite a hawkish tone.

HSBC predicts further U.S. dollar weakness amid influences from trade policy, fiscal debates, and geopolitical tensions on forex markets. The bank suggests monitoring real-time indicators like the Economics Calendar for key economic data and the Commodities section for updates on rate-sensitive assets like gold and oil.



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