Fed Rate Cut Expectations Grow
According to the latest Reuters survey, a majority of economists anticipate the Federal Reserve will cut the federal funds rate by 25 basis points by the end of June, bringing it down to a range of 3.25%-3.5%. Out of 101 economists surveyed, more than half provided this forecast.
Factors Influencing Policy Shifts
This expectation is mainly driven by recent economic indicators. Inflationary pressures have eased, and signs of a slowdown in the labor market have provided room for policy adjustments.
- Inflation remains below projections
- Job growth shows weakening trends
- Global economic uncertainty rises
Market Response and Outlook
Financial markets have already shown initial reactions, with modest stock gains and declining bond yields. Investors are closely watching the Fed’s next steps, with expectations of further easing possible in the second half of the year.