Is it Possible for the Fed to Cut Rates by More than 50 Basis Points in 2025?

Forex - The Fed's median forecast for interest rates in 2025 is only a 50 basis points rate cut, but BCA Research expects more. BCA analysts argue that it is likely inflation will come in below the Fed's 2025 projections, while unemployment will be above them. BCA concludes, “This implies that more than a 50 basis points easing will be necessary.” They stated, “The Fed's unemployment rate forecast of 4.3% by the end of 2025 will require a significant improvement in labor market momentum, which is particularly a trend change we do not anticipate.” U.S. money markets are currently pricing in only a 35 basis points rate cut for 2025.