Done by Divya Chaudhary and Bansari Mayur Kamdar
DAVOS, Switzerland (Reuters) – The U.S. Federal Reserve is likely to cut interest rates nearly every quarter in 2025, the chief investment officer of Guggenheim Partners predicted on Monday, cutting the rate this year by about 75 basis points or even more. That will bring up to a whole percentage point.
The Fed will continue tapering, albeit on a slower path than expected, Guggenheim CIO Anne Walsh told Reuters’ Global Markets Forum at the start of the World Economic Forum’s annual meeting in Davos.
Traders have been betting in the past few days on just one Fed rate cut this year, with the possibility of a second cut pending, down from at least three a month ago.
Tariffs expected to be imposed by incoming President Donald Trump likely won’t be as punitive as expected, Walsh said, as long as the dollar remains strong as a reserve currency and the U.S. attracts capital. continues to fascinate.
Walsh expects tariffs, on average, to rise by less than 10% across the board, and be more country-specific.
After a sharp bull run through 2022, the bond market is now trading in a range for its third year, Walsh said, adding that volatility makes it interesting.
“If we get to 5% on the 10-year, that’s so high, and it’s such an oversold situation, it’s a total buying opportunity,” Walsh said, adding that bond yield spreads remain tight. can continue, which will also be good for American Equity.
He expected stocks to further benefit from positive global themes such as artificial intelligence (AI), energy and the re-shoring of manufacturing in the US, with the S&P 500 delivering returns of 8%-10% through 2025. Hope to do
Walsh said there is some uncertainty associated with Trump’s policies and what is actually implemented by his incoming administration, and there is also a risk that the U.S. economy slows more than currently forecast.
“It’s like a game of ping pong between politics and policy, and that’s going to create a lot of volatility around our (investment) themes this year,” Walsh said.
(Join GMF, a chat room hosted on LSEG Messenger, for live interviews: https://lseg.group/4ajdDTy)
(Reporting by Divya Chaudhary in Davos and Bansari Mayur Kamdar; Editing by Alexander Smith)
