BlackRock 2025 Outlook: The AI boom continues to boost U.S. stocks, and the Federal Reserve is expected to be unable to lower interest rates below 4%

The world's largest asset management company, BlackRock, expects that the artificial intelligence (AI) boom will continue to boost U.S. stocks next year and support broader economic growth, although rising U.S. debt levels may threaten its optimistic forecast for 2025. Innovations in AI technology could benefit U.S. stocks more than European stocks. While U.S. economic growth may cool slightly next year, the Federal Reserve is unlikely to significantly cut interest rates, as inflation remains sticky and above the Fed's target. Interest rates are expected to remain above 4% from the current 4.5%-4.75%. Ongoing price pressures from factors such as geopolitical divisions and infrastructure spending may put pressure on the bond market