Allianz Chief Economist: Expected Fed to cut interest rates once in 2025

According to Golden Finance, Allianz Chief Advisor El Erian expects the Federal Reserve to only cut interest rates once this year, which is in stark contrast to market and Federal Reserve expectations. The market has fully priced in the expectation of at least two interest rate cuts by 2025, and there is likely to be a third one. Overall, they expect to cut interest rates by about 70 basis points this year, with the first cut of 25 basis points in July. At the same time, the latest dot matrix from the Federal Reserve only requires two interest rate cuts. Elian said that the Federal Reserve is essentially dovish, and he added that he is concerned that the Fed may ignore weak economic data and call the upcoming tariffs temporary until they truly understand the details of these tariffs and how countries will respond.