From Barron’s: 2025-03-19 14:02:00

Federal Reserve officials are expected to lower interest rates by 0.5% in 2025 due to moderate inflation levels and a strong job market. The median forecast predicts a federal-funds rate of 3.75% to 4% by year-end, down from the current 4.25% to 4.5%. Interest-rate futures suggest cuts in June, July, and fall.

The Fed’s “dot plot” chart reveals anonymous forecasts from officials at regional banks and Board of Governors members. Forecasts for the federal-funds rate at the end of 2025 range from 3.75% to 4%, aligning with previous projections from December. Market expectations indicate rate cuts in June, July, and later in the year.

Investors are pricing in rate cuts at the Federal Open Market Committee meetings in June and July, with the possibility of another cut in the fall. Interest-rate futures show low odds of further easing at the Fed’s upcoming meeting in May. The Fed’s stance is consistent with market expectations for 2025 rate cuts.

Read more: The Fed Is Still Signaling 2 Rate Cuts for This Year