Economists foresee a challenging economic landscape for 2025, driven by the interplay of interest rates, unemployment, and inflation. As the effects of high inflation diminish, GDP growth is expected to improve slowly.
The Reserve Bank may begin cutting rates as early as May, offering relief to those burdened by elevated living costs. Meanwhile, geopolitical factors, particularly tensions in the Middle East and Ukraine, could influence economic recovery.
Federal Reserve Chair Jerome Powell has expressed concerns over persistent inflation, indicating that mortgage rates remain a critical issue for potential buyers. With Trump's policies potentially impacting housing, the Federal Reserve will navigate carefully, anticipating a federal funds rate of 3.875% by the end of 2025. Overall, a gradual economic recovery, marked by volatility and uncertainty, appears on the horizon.
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