Agency: Market pricing of the Fed's rate cut seems reasonable

Odaily News Noah Wise, senior portfolio manager at Allspring Global Investments, said the market's expectation that the Federal Reserve will cut interest rates three or four times in 2025 and five or six times by July 2026 is reasonable. "Not because that's what we expect, but because it strikes a delicate balance between two very different but very likely scenarios." In the first scenario, inflation remains high and the economy avoids a recession, which means the Fed will cut interest rates at a slower pace than the market currently expects. In the other scenario, the economy declines and inflation falls, and there may be five or six rate cuts by the end of 2025 and eight or more rate cuts by July 2026, depending on the severity of the recession. (Jinshi)