Singapore Bank: The Federal Reserve's easing cycle is nearing its end, with only one rate cut expected in the first half of the year
Singapore Bank believes that the Federal Reserve's easing cycle is nearing its end, expecting only one more rate cut (25 basis points) in the first half of 2025, keeping the federal funds rate at 4%-4.25% until the end of 2025. Therefore, the institution remains cautious about U.S. long-term bonds, maintaining its forecast that the yield on 10-year U.S. Treasury bonds will reach 5% this year, and continues to be optimistic about the U.S. dollar. Singapore Bank's chief economist, Mohan Su, stated that the U.S. employment data from December last year far exceeded expectations. Non-farm payrolls increased by 256,000, significantly higher than the market expectation of 165,000. The unemployment rate fell from 4.2% to 4.1%, and average hourly wages rose by 0.3%, remaining robust. Non-farm employment data indicates that the U.S. is continuing to move towards a "soft landing" in 2025, rather than falling into an economic recession. He expects that the consumer price index (CPI) for December last year, to be released this week, will show that core inflation remains at 3.3%, well above the Federal Reserve's target of 2%
According to the Zhitong Finance APP, Singapore Bank believes that the Federal Reserve's easing cycle is nearing its end, expecting only one more rate cut (25 basis points) in the first half of 2025, keeping the federal funds rate at 4%-4.25% until the end of 2025. Therefore, the institution remains cautious about U.S. long-term bonds, maintaining its forecast that the yield on 10-year U.S. Treasury bonds will reach 5% this year, and continues to be optimistic about the U.S. dollar.
Singapore Bank's chief economist, Moman Su, stated that the U.S. employment data from December last year far exceeded expectations. Non-farm payrolls increased by 256,000, significantly higher than the market expectation of 165,000. The unemployment rate fell from 4.2% to 4.1%, and average hourly wages rose by 0.3%, remaining robust. Non-farm employment data indicates that the U.S. is continuing to move towards a "soft landing" in 2025, rather than falling into an economic recession.
He expects that the consumer price index (CPI) for December last year, to be released this week, will show that core inflation remains at 3.3%, well above the Federal Reserve's target of 2%