In her view, inflation is “under control” and labour demand has “softened”, supported by the Fed’s 50 basis points (bps) cut in September.
Schroders expects the US Federal Reserve (US Fed) funds rate to hover between 3.5% and 4% at the end of 2025. The current Fed funds rate as at Nov 1 is at 4.83%.
Given that the US economy is healthy, Michelle Russell-Dowe, co-head of private debt and credit alternatives at Schroders, believes that the market is overestimating what the US Fed will do.
