Allianz chief economist: expect the Fed to cut rates once in 2025

Allianz Chief Advisor El-Erian expects the Fed to cut rates only once this year, which contrasts with market and Fed expectations. The market has fully priced in the expectation of at least two rate cuts in 2025 and likely a third. Overall, they expect about 70 basis points of rate cuts this year, with the first 25 basis points cut in July. Meanwhile, the Fed's latest dot plot calls for only two rate cuts. The Fed is ‘inherently dovish’, El-Erian said, adding that he was concerned that the Fed was ignoring weak economic data and calling the impending tariffs temporary until it really knows the details of those tariffs and how countries will respond.