Citi and Deutsche Bank: Expect the Fed to cut interest rates at a faster pace in the coming months

Economists from Morgan Stanley and Deutsche Bank now predict that the Federal Reserve will cut interest rates at a faster pace in the coming months, as slowing inflation and a weak labor market allow for quicker action. Deutsche Bank increased its expectations for rate cuts in the remaining time of 2025 to three times on Friday. The bank had previously expected that Federal Reserve officials led by Chair Powell would cut rates this month, then pause until taking action again in December. Meanwhile, economists at Morgan Stanley currently anticipate that the Federal Reserve will cut rates at four consecutive meetings, until January next year.