Institution: The Fed is almost certain to cut interest rates twice again in 2025.

GateUser-6433627c · 2025-10-27T08:25:59+00:00

The head of Aptus Capital Advisors stated that given the Fed's focus on the labor market and easing price pressures, it is expected that interest rates will be cut twice in 2025, but the sustainability of cuts in 2026 is in doubt. The market anticipates three rate cuts in 2026, which could lead to the federal funds rate falling to around 3%. As the easing policy gradually transmits, the economy may accelerate its rise again, and inflation data may rebound.

GateUser-6433627c

2025-10-27 08:25:59

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On October 27, John Luke Tyner, head of the fixed income department at Aptus Capital Advisors, stated that considering the Fed's shift to focus on the labor market and signs showing that price pressures have eased, it is almost certain that the Fed will cut interest rates twice more in 2025. However, entering 2026, the sustainability of the rate-cutting cycle will be questioned. The market expects the Fed to lower rates about three times in 2026, which would bring the federal funds rate down to around 3%. As the easing policy gradually transmits (with a time lag), we are concerned that the economy may accelerate growth again, while other factors such as energy prices may bottom out and rise, which could cause inflation data to bottom out again (Rebound). (Jin10)

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