Federal Reserve Expected to Extend Rate Cuts Through Late 2025 Amid Inflation Uncertainty

Financial markets in 2025 are closely monitoring the Federal Reserve's anticipated interest rate cuts, which are expected to begin in September and continue through the end of the year due to a weakening labor market and easing inflation pressures. The August jobs report revealed significantly fewer payroll additions than expected and a historic downward revision of prior job numbers, alongside rising unemployment and slowing wage growth, prompting expectations of sustained monetary easing. Inflation data show a consistent trend of monthly inflation rates below 2%, with Argentina's Consumer Price Index for August reported at 1.9%, marking the fourth consecutive month under this threshold, although some analysts predict a possible rise above 2% in September influenced by recent political developments and market reactions. Market sentiment reflects uncertainty with the US dollar and stock markets reacting to inflation data releases, as traders anticipate the Federal Reserve's next moves amid forecasts of multiple rate cuts in 2025. Analysts caution that while inflationary pressures may increase due to economic and political factors, subdued economic activity and import restrictions are expected to limit the extent of price rises. Overall, these economic indicators and market responses underscore a complex environment of cautious easing alongside concerns over inflation and economic growth.