Federal Reserve Unlikely to Cut Interest Rates Further in 2025

Stronger-than-expected economic growth and a resilient labor market shift expectations toward potential rate hikes.

The Federal Reserve is now widely expected to maintain current interest rate levels throughout 2025, with some analysts predicting potential hikes instead of further cuts.
December's robust jobs report, showing 256,000 new jobs and a decline in unemployment, has challenged earlier forecasts of economic slowdown.
Inflation remains above the Fed's 2% target, with some strategists citing risks of further inflationary pressures from proposed tariffs and policy changes under President-elect Trump.
Wall Street sentiment has shifted, with major banks like Bank of America and BNP Paribas suggesting that the Fed's rate-cutting cycle is over for now.
The bond market reflects this outlook, with rising Treasury yields signaling investor expectations of sustained or higher rates in the near future.