December 2024 Investment and Economic Outlook: Expert Analysis
The U.S. economy is in a good place right now, with solid GDP growth, low unemployment, and inflation on the decline. Recent improvements in the labor force and productivity have played a big role in shaping this economic landscape over the last couple of years.
Looking ahead, we can expect the Federal Reserve to make another cut to its short-term rates on December 18, 2024. This move would set the policy rate at 4.25%–4.5% by year-end. We anticipate further rate reductions in 2025, with the target range likely to be 3.75%–4%. However, additional cuts may be challenging as any slowdown in growth would need to be balanced against the risk of inflation picking up.
For the full year of 2024, GDP growth is expected to be around 2.3%, and growth should stay above 2% in 2025. Inflation, specifically core PCE, is projected to rise to 2.9% by the end of this year due to tough year-over-year comparisons, but it should drop to 2.5% by the close of 2025. As for the unemployment rate, we may see a slight increase in 2025, hovering around the mid-4% range.
Overall, the economic forecast is looking positive, with some key indicators pointing towards continued stability and growth in the coming year. It’s important to stay informed and aware of these trends as they can impact various aspects of our daily lives.
