A new poll by Reuters (TRI) has found that a majority of economists expect the U.S. Federal Reserve to lower interest rates at its final meeting of the year on December 18.
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Economists surveyed by Reuters anticipate a 25-basis point reduction at the December meeting. If the consensus view is accurate, the Fed will have lowered interest rates a full percentage point this year after raising rates to lower inflation that peaked in America at 9.1% in summer 2022.
However, economists who were surveyed said they expect the U.S. central bank to slow its pace of interest rate cuts in 2025 due to the risk of higher inflation under a second Donald Trump presidency. Trump’s proposals for higher tariffs and tax cuts could lead to a rise in inflation next year, say economists.
Inflation to Return?
Nearly 90% of 106 economists polled by Reuters said that they expect a 25-basis point rate cut from the Fed this December, taking the benchmark Fed Funds Rate down to a range of 4.25% to 4.50%. However, 85% of economists also said the risk of inflation rising next year has grown with a second Trump term.
A majority of economists surveyed said the Fed will likely deliver another 25-basis point rate cut in the first three quarters of 2025 but then hold rates steady for the remainder of the year. Futures traders are placing the odds of a 25-basis point rate cut from the Fed in December at 60%.
Is TRI Stock a Buy?
The stock of Thomson Reuters has a consensus Moderate Buy rating among nine Wall Street analysts. That rating is based on three Buy and six Hold recommendations made in the last three months. There are no Sell ratings on the stock. The average TRI price target of $178.30 implies 11.63% upside from current levels.
