Looking ahead to 2025, the US economy will grow slightly above the trend, reaching 1.9%.
The Zhitong Finance App learned that Cai Yongxiong, chief economist at the Bank of East Asia (00023), said that US inflation is expected to slow moderately, but it is still higher than the policy target for some time. It is expected that the Fed will cut interest rates by 1/4 percent every quarter in the first half of 2025, then the pace of interest rate cuts will slow further. In order to avoid tight market liquidity, it is expected that the downsizing will be adjusted around mid-2025. Overall, it is predicted that the US monetary policy will continue to move from austerity to neutrality. He also pointed out that in 2025, the ECB is expected to cut interest rates at least once a quarter per quarter and 1% throughout the year.
He said that the US economic performance in 2024 has surpassed expectations. The US economy is outstanding, and growth is expected to reach 2.5% for the full year of 2024, higher than its trend. US President-elect Trump will take office in January 2025, and the Republican Party will successfully seize control of both houses of the Senate and the House of Representatives. It is expected that most of Trump's policy proposals will pass. Trump's MAGA policy mainly focuses on strengthening America's internal interests, which may stimulate economic growth, but it may also increase inflationary pressure and influence the pace of future interest rate cuts by the Federal Reserve. Looking ahead to 2025, the US economy will grow slightly above the trend, reaching 1.9%.
