The National Association for Business Economics (NABE) predicts the Federal Reserve will cut interest rates by 25 basis points in December and another 50 basis points next year.

According to Odaily Odaily, the National Association for Business Economics (NABE) stated in its annual forecast survey that the U.S. economy will grow slightly faster next year, but job growth will remain weak, and the Federal Reserve will slow the pace of further interest rate cuts. The survey, which covered 42 professional forecasters, showed a median economic growth forecast of 2%, up from 1.8% in the October survey. Increased personal spending and business investment are expected to drive economic growth, but professional forecasters almost unanimously believe that the Trump administration's new import tariffs will drag down growth by at least 0.25 percentage points. The survey report stated that "respondents consider the 'tariff impact' to be the biggest downside risk to the U.S. economic outlook." Stricter immigration enforcement is also seen as a factor inhibiting economic growth, while increased productivity is considered the most likely factor to drive higher-than-expected growth. Furthermore, inflation is projected to be 2.9% by the end of this year, slightly lower than the 3% forecast in the October survey, and is expected to decline only slightly to 2.6% next year, with tariffs expected to contribute 0.25 to 0.75 percentage points. Job growth is expected to remain moderate by historical standards, with approximately 64,000 new jobs added per month, well below recent averages. The unemployment rate is projected to rise to 4.5% in early 2026 and remain at that level throughout the year. With persistently high inflation and only a slight increase in unemployment, the Federal Reserve is expected to cut interest rates by 25 basis points in December, but only by another 50 basis points next year, close to the roughly neutral interest rate level of monetary policy. (Jinshi)