Will Interest Rates Increase in 2025? A Deep Insight into Economic Predictions

The risk market effectively priced in the rate cuts that began late last year. However, conditions have changed, leading to increased fear as the market appears to be overvaluing recent data. So, will the Fed really raise interest rates this year? What is the prediction for 2025? Economic Policy and Trust Trump is appointing members of his party to lead most of the important organizations, leading to changes in management throughout the SEC, CFTC, many departments, etc. However, he does not touch the Fed, which shows respect for the independence of the monetary policy organization. Trump will allow Powell to remain in his position until the end of his term, meaning that the Fed will not undergo significant changes after Trump's election. Regardless of who holds the presidency, Biden or Trump, the Fed will continue to operate.

Will Interest Rates Increase in 2025? Trump's presidency will bring changes to customs duties and immigration policies. The Fed has made various forecasts since November regarding these inflation risks, but they cannot make a definitive statement. So, will current data push the Fed to abandon cuts and continue raising interest rates? No, especially with recent data showing that a rate hike is not imminent. Such significant "reversals" require a carefully prepared foundation and timely market warnings. Is there any precedent for this? The Fed cut interest rates in late 1998 due to the risks posed by Long-Term Capital Management to the stock market. After things stabilized, they continued to raise interest rates, for seven months even amidst an economy shaken by the dot-com bubble. Are we in a worse situation now than during the dot-com crisis? No, inflation has not changed significantly from 2%. Therefore, if there is a rate hike this year, signals must be transmitted in April or May, possibly requiring inflation to rise to a mandatory level of about 5%. Ed Al-Hussainy, global interest rate strategist at Columbia Threadneedle Investments, notes that conditions are still not ripe for the Fed to confidently propose a rate hike. If the Fed begins to discuss raising interest rates with certainty, the market will quickly begin to price this in. This is a long process and not something that can be achieved in a few weeks. Therefore, we will monitor employment data, inflation, and PMI to estimate the direction of the economy. DYOR! #Write2Earn #BTCBackto100K $BTC {spot}(BTCUSDT)