Market's Bull RunContinuation, or Could It Be a Sugary Substance Rising?
U.S. Interest Rate Forecast for 2025: Potential Halt to Further Decreases
The unpredictable trajectory of U.S. interest rates in the immediate future has raised eyebrows among financial analysts and investors. The reasons for this uncertainty revolve around the current state of inflation and monetary policy.
Inflation, as reported on Wednesday, has once again reached the 3% mark, its pace quicker than anticipated. This unexpected occurrence has cast doubt over whether the U.S. Federal Reserve will choose to lower interest rates further or if a shift in monetary policy is imminent.
No More Rate Cuts Projected by Asset Manager Antecedo
Of significance is the forecast by Antecedo, a prominent asset manager, which suggests that there will be no additional interest rate cuts in the U.S. this year. Kay-Peter Toennes, head of portfolio management at Antecedo, explains, "We have repeatedly warned about the inflation risks associated with the new U.S. government's economic policies. It is surprising, however, to see inflationary pressures surface at this early stage, rather than after the widespread implementation of tariffs and stricter immigration policies."
This anticipated stability in interest rates initially may present a challenge for stock markets. However, certain sectors, such as technology stocks, may continue to perform well, due to their projected promising profit growth.
The Long-Term Prospect of Interest Rates
Interest rates beyond 2025 might not solely depend on inflation. The term of current Fed Chairman, Jerome Powell, ends in May 2026. Should former President Donald Trump, a vocal critic of high interest rates, reclaim the presidency and appoint his successor, this switch would undoubtedly hold significant implications for the direction of monetary policy in the U.S. "This personnel decision will begin to shape the future course of U.S. monetary policy this year," says Antecedo.
Stay tuned for more analysis on other significant stocks, such as a potential mass sell signal for popular German stocks and strategies regarding Siemens and SAP stocks in light of recent developments.
Enrichment Data Relevance Assessment
The Enrichment Data provides a comprehensive overview of the current interest rate situation, monetary policy, and inflation. To avoid overwhelming the article with excessive financial jargon, I have integrated the following essential insights:
- As of May 2025, the Fed has held the federal funds rate steady for several meetings, with no immediate plans to hike rates.
- Economic activity is expanding, and inflation remains elevated, although it is gradually moderating.
- The Fed is likely to keep rates steady in the near term but may cut rates later in 2025 to counteract slowing economic growth and higher inflation.
Investing in the stock-market may face a challenge due to the anticipated stability in U.S. interest rates, as forecasted by Antecedo, an asset manager. The long-term prospect of interest rates might not solely depend on inflation, as the term of current Fed Chairman, Jerome Powell, ends in May 2026, which could potentially lead to a shift in monetary policy if former President Donald Trump, a vocal critic of high interest rates, reclaims the presidency and appoints his successor.
