Analyst: The Fed May Only Cut Rates When Weak Employment Data Emerges

Analysts at Metzler believe that the money market may be overly optimistic about the Federal Reserve cutting interest rates this year. Metzler maintains its forecast that the Federal Reserve will cut rates twice in 2025 and now expects the next easing policy to be introduced only in July, mainly due to the continued strength of the U.S. labor market. According to LSEG data, the money market expects three rate cuts in 2025. Analysts anticipate that Powell will focus on the issue of price stability during the press conference. In particular, the rising inflation expectations are currently causing concern for monetary authorities. A rate cut is only possible if the weakness in the U.S. economy is reflected in the labor market.