The US economy is expected to continue thriving in 2025, with inflation staying above the Federal Reserve’s target rate. The labor market is also showing signs of strength, with declining unemployment rates and rising wage growth. However, these indicators complicate the Fed’s plans for rate cuts.
Market expectations have shifted, pricing in fewer rate cuts in 2025 and potential rate increases. A resilient economy and sticky inflation are driving this shift. Some analysts predict a multiple contraction in the S&P 500, leading to a 25% decline.
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Source: https://seekingalpha.com/article/4746699-6-big-market-predictions-for-2025