Bank of America Asked Fund Managers: What Will Interest Rates Be in the US in 2025? When Will the Cut Come?

A recent global fund manager survey conducted by Bank of America revealed that the majority of investors predict that the FED will lower interest rates in 2025.

According to a survey conducted in February, 77% of fund managers expect a rate cut, with 46% expecting two cuts, 27% expecting one cut, and 4% expecting three cuts. Meanwhile, 19% of participants believe that interest rates will remain unchanged, with only 1% predicting an interest rate hike.

Interest rate cut expectations are emerging in an environment where inflationary pressures persist. The exceeding of January inflation data estimates led to a sharp decline in the stock markets and an increase in borrowing costs. These market movements reflect concerns that the Fed may keep interest rates higher for longer than previously expected.

Comerica Bank's chief economist Bill Adams stated that he supports the view that the latest inflation data indicates that underlying price pressures continue to be a concern. In a note to clients, Adams said, 'The Fed will see the high inflation data in January as confirmation that price pressures continue to bubble beneath the surface of the economy,' and added, 'This will strengthen the Fed's inclination to slow down and possibly even end interest rate cuts in 2025.'

RSM US's chief economist Joseph Brusuelas also expressed a similar view, revising his forecast to a single interest rate cut in December.