The forecasts for the FED in 2025 have changed; Bank of America expects an increase instead of a rate cut.

The world-renowned two banks have changed their expectations for the Federal Reserve (FED) in 2025. Bank of America, Goldman Sachs, and Citi Group expect the FED to make two interest rate cuts instead of three in 2025.

FED RAISED INTEREST RATES BY 525 BASIS POINTS IN 4 YEARS

After the economic impacts of the COVID-19 pandemic, the FED made a series of 11 interest rate hikes starting in March 2020, totaling 525 basis points.

In September 2024, after four years, the FED decided to cut interest rates, reducing the policy rate by 50 basis points to a range of 4.75-5.00 percent. Before entering 2025, the FED made another interest rate cut decision in December 2024, lowering the rate by 25 basis points to a range of 4.25-4.50 percent.

WHEN IS THE FIRST INTEREST MEETING OF 2025?

The FED's first meeting of 2025, which will closely affect markets including gold, the dollar, and Bitcoin, will take place on January 28-29. The interest rate decision will be announced on January 29 at 22:00.

WORLD-RENOWNED BANKS REVISED THEIR INTEREST RATE FORECASTS

Two world-renowned banks, Goldman Sachs and Citi Group, revised their forecasts following the non-farm payroll data announced on January 10.

BANK OF AMERICA DOES NOT EXPECT A RATE CUT FROM THE FED

Bank of America, which previously expected a two-quarter point rate cut from the FED for 2025, has now announced that it no longer expects a rate cut.

The bank indicates that the FED may raise rates instead of cutting them.

CITI GAVE A TIMELINE FOR THE CUT

Previously predicting that the FED could cut rates three times in 2025, Citigroup has now reduced its expectation to two.

Citi also forecasts that the FED will start cutting rates in May instead of January. Citigroup economists stated in their report, "We are not concerned about scenarios where the FED does not cut rates this year or considers raising rates."

GOLDMAN GAVE A TIMELINE FOR 2026

Goldman Sachs, which expects cuts from the FED in March, June, and September, has reduced its forecast to two, in June and December. Goldman also expects the FED to make another rate cut in June 2026.