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*Bank of America now sees two 2025 rate cuts**

    Bank of America (BofA) has revised its outlook: the Federal Reserve is expected to trim the federal funds rate twice in 2025—once in September and again in December—each cut by 25 basis points. The target range would fall to 3.75 %–4.00 %. This follows an earlier forecast of no cuts until 2026.

    **Why the shift?**

    BofA’s change stems from the August jobs report, which showed only 22,000 new jobs and a 4.3 % unemployment rate—its weakest job growth since 2020. The data suggest the economy may be cooling, prompting the Fed to consider easing its tight stance.

    **Current backdrop**

    - Fed’s policy rate has been held at 4.25 %–4.50 % for most of 2025, after three cuts in late 2024 that lowered it from 5.25 %–5.50 %.

    - Inflation sits near 2.4 %–2.5 %, close to the Fed’s 2 % goal.

    - The pause in hikes was aimed at containing price pressures while monitoring economic resilience.

    **What the cuts could mean for you**

    | Area | Potential Impact |

    |------|------------------|

    | **Borrowing** | Mortgage, auto, and credit‑card rates could drop, easing monthly payments. |

    | **Savings** | Lower yields on deposits and CDs may push savers toward alternative assets. |

    | **Business** | Cheaper capital could spur investment and expansion. |

    | **Equities** | Reduced borrowing costs may lift market sentiment, though inflation remains a risk. |

    **BofA’s new numbers in context**

    - September cut: 25 bps → 4.00 %–4.25 %

    - December cut: 25 bps → 3.75 %–4.00 %

    - 2026 outlook: three additional cuts, bringing rates to 3.00 %–3.25 %

    Even with these cuts, inflation near 3 % means the Fed will likely proceed cautiously.

    **Other major banks’ 2025 expectations**

    | Institution | Expected 2025 cuts (bps) | End‑2025 rate range |

    |-------------|--------------------------|---------------------|

    | BofA | 50 (Sep & Dec) | 3.75 %–4.00 % |

    | JPMorgan | 100 | 3.25 %–3.50 % (by Q1 2026) |

    | Morgan Stanley | 75 (Sep, Dec, possible third) | 3.50 %–3.75 % |

    | Goldman Sachs | 50 | 3.75 %–4.00 % |

    | CME (market) | 75–100 (probabilistic) | 3.50 %–3.75 % |

    **Key economic indicators that prompted the change**

    - **Job growth**: 22,000 new jobs in August (lowest since 2020).

    - **Unemployment**: 4.3 %.

    - **Wage growth**: 0.2 % monthly, 3.9 % yearly, easing pressure on inflation.

    - **CPI**: ~2.5 % YoY.

    - **GDP**: 2.8 % growth earlier in the year.

    **Historical perspective**

    The Fed’s current pause mirrors earlier cycles where it halted hikes to tame inflation, then cut rates in 2001 and 2008 to stave off deeper downturns. Those actions sometimes spurred asset bubbles, underscoring the delicate balance between easing and overheating.

    **Impact on different stakeholders**

    - **Consumers**:

     - Mortgage rates could dip below 6 %, saving borrowers.

     - Lower savings yields may push people toward higher‑yielding investments.

     - Big‑ticket purchases might rise, but job‑security concerns could temper spending.

    - **Businesses**:

     - Cheaper borrowing encourages capital expenditures and hiring.

    - **Financial markets**:

     - Housing, consumer‑spending sectors may rally.

     - Bonds and real‑estate could see favorable conditions.

    **Fed’s stance**

    Fed officials have adopted a more dovish tone, signaling that gradual cuts are plausible. Their focus remains on keeping inflation near 2 % while supporting growth.

    **Practical takeaways**

    1. **Stay informed**: Monitor job reports, CPI, and Fed statements.

    2. **Reassess your portfolio**: Consider shifting toward assets that benefit from lower rates (e.g., real estate, dividend‑yielding stocks).

    3. **Plan for borrowing**: Lock in mortgage or loan rates if you anticipate future cuts.

    4. **Watch savings**: Explore higher‑yielding alternatives if bank rates decline.

    **Norada Real Estate: Protecting your investments**

    If you’re looking to hedge against rate volatility, Norada Real Estate offers cash‑flowing properties in stable markets. Contact a Norada investment counselor at (800) 611‑3060 to explore opportunities.

    **Further reading**

    - Fed holds rates steady for the fifth time in 2025

    - Fed projects two cuts later in 2025

    - Interest‑rate forecasts for 2025–2027

    - Upcoming Fed meetings in 2025

    - Impact of rate cuts on mortgages, auto loans, and wallets

    Keep these insights in mind as the Fed’s next moves unfold.