Fed Expected to Cut Rates in December and January: RBC Analysis
Fed Expected to Cut Rates in December and January: RBC Analysis
RBC anticipates two 25 basis point rate cuts:
December 17-18 FOMC meeting: A 25bp rate cut is expected.
January 31-February 1, 2025, meeting: Another 25bp rate cut is anticipated.
Reasons for rate cuts:
The pace of easing has slowed.
Recent Fed communications hint at smaller rate cuts.
The economy is showing signs of gentle slowing, suggesting normalization rather than cyclical weakness.
The upcoming inflation report could influence the decision; if inflation data is weak, it supports the case for a 25bp rate cut in December.
Post-February rate cut:
After the February rate cut, RBC expects the Fed to pause and reassess economic conditions.
