The Federal Reserve is expected to lower interest rates, not just this week, but also in 2025. Current rates are considered significantly contractionary, according to statistical models that aim to strike a balance between expansion and contraction.
These models indicate that the real short-term interest rate should be neither too high, which would fuel economic growth, nor too low, which could stifle it. With current rates at this level, the Fed is likely to take action to stabilize the economy.
The decision will be based on sophisticated statistical analysis, aiming to balance economic growth with inflation control and job creation. The impact of rate cuts on the economy will depend on various factors, including inflation rates and labor market conditions.
Source: https://www.marketwatch.com/story/the-little-known-reason-why-the-fed-will-continue-to-lower-rates-in-2025-de960e86