Canadian Association for Business Economics: Fed needs to cut rates by more than 50 basis points next year

The Fed's median forecast for interest rates in 2025 is just a 50 basis point cut, but the Business Economics Association of Canada (BCA) expects more cuts. Inflation is likely to be lower than the Fed's 2025 forecast, while unemployment is likely to be higher than the Fed's 2025 forecast, BCA analysts said in a note. "As a result, more than 50 basis points of easing will be needed," they said. The Fed forecast an unemployment rate of 4.3% by the end of 2025. "This would require a significant improvement in labor market momentum, which we believe is unlikely to change." It may happen." (Jin Shi)