Just a quick snippet from HSBC, analysts at the bank are still forecasting more rate cuts ahead from the Federal Reserve:
- 75bp of rate cuts ahead for 2025
- 25bps steps at the March, June, and September meetings
- "one more cut than the median expectation of Fed members, largely because we find it odd that the Fed is expecting no further deterioration in unemployment"
- then shrinking back to no further rate cuts at all in 2026
More:
- US equities, the fundamentals remain constructive... with a less aggressive Fed easing cycle, the upside clearly has to come from earnings, not valuation multiples
- earnings expectations – especially outside of the Magnificent 7 – are low, providing a low bar to exceed
- US dollar strength should continue as other central banks could ease more aggressively, causing USD to benefit from an attractive rate differential
