Wells Fargo’s Forecast for the Number of Federal Reserve Interest Rate Cuts in 2025

As 2025 approaches, Wells Fargo predicts the Fed could adopt a slower pace of rate cuts, potentially cutting once every two policy meetings.
“As we get into 2025, we could see a slowdown in future rate cuts, with the Fed potentially cutting rates every other meeting,” said Sarah House, senior economist at Wells Fargo.
Wells Fargo’s team is forecasting three rate cuts in 2025, a moderate approach compared to the rapid rate-cutting cycle seen before. This is in line with broad expectations on Wall Street that the Fed’s aggressive easing will ease as economic conditions improve.
Market expectations currently are for the Fed to cut interest rates twice in 2025, according to Bloomberg. Other major institutions like Morgan Stanley and JPMorgan Chase share a similar view to Wells Fargo, with estimates that the federal funds rate will settle between 3.5% and 3.75% by the end of 2025.
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The Federal Reserve’s updated economic projections, expected Dec. 18, could shed more light on the projected path for monetary policy, but policymakers remain divided on the precise trajectory of interest rate adjustments.
Societe Generale, meanwhile, sees the Fed continuing to cut short-term interest rates, but a combination of financial and economic pressures will push longer-term rates higher. The bank predicts the yield on 10-year U.S. Treasury notes will rise to 4.5% by the end of 2025, while the yield on two-year notes will fall to 3.5%.
*This is not investment advice.