Deutsche Bank economist: expect the Fed to cut interest rates three times this year, the first half of 2025 pause rate cuts

Deutsche Bank economists said the 10-year U.S. bond yield could close at 4.25% this year as the Federal Reserve is likely to cut rates three times before pausing in the first half of 2025 and resuming monetary easing in the second half of the year. The Fed is expected to begin cutting rates in September, which is consistent with market pricing.

This week, the Fed is expected to leave rates unchanged. Economists expect long-dated US bond yields to rise faster than short-dated bonds, reflecting the fact that the pace of rate cuts next year will be slower than the market expects.