Today, the Securities Industry and Financial Markets Association (SIFMA) published the results of its Economic Advisory Roundtable biannual survey.
The Roundtable is comprised of the chief U.S. economists from over 20 global and regional financial institutions. The survey assesses the economic landscape and monetary policy and highlights expectations for 2.4% real GDP growth in 2024 and 1.9% in 2025. The majority of our economists expect three to five Federal Reserve rate cuts by the end of 2025, with a range of estimates for the aggregate number of cuts.
“As we approach the end of 2024, our survey reveals the U.S. economy’s extraordinary growth and projects continued strength into 2025,” said Jay Bryson, Ph.D., Chair of the SIFMA Economist Roundtable and Managing Director and Chief Economist at Wells Fargo Securities. “Nearly half of the panelists place the odds of recession in 2025 at less than 15%, while one-third predict a likelihood between 15% and 30%. The dispersion of forecasts for 2025 indicates some difference of views that may reflect policy uncertainty with the incoming administration. Overall, real GDP growth should remain solid, inflation should continue to recede, and the Federal Reserve will cut rates lower, signaling continued economic stability.”
Key Takeaways:
- Monetary Policy: All our economists expect a rate cut at the December FOMC meeting with 90% forecasting a cut of 25 bps. The median forecaster looks for the midpoint of the target range to end 2025 at 3.560% (roughly 100 bps in cuts from current rate) and to end 2026 at 3.375% (a total of 125 bps in cuts from the current rate). Nearly 60% of our economists estimate the neutral nominal fed funds rate to be 3.0%-3.5%.
- Inflation: The median forecaster looks for core PCE inflation to end 2024 at 2.8% (year-over-year), which is unchanged from the last full survey in June 2024 and 0.1 pps higher than the September 2024 flash poll. In 2025, core PCE inflation is estimated to decrease to 2.4%, up 0.1 pps from the June survey. The top factors influencing forecasts for core inflation estimates are wage growth, growth in domestic demand, and monetary policy.
- Economy: The median economist forecasts real GDP will grow 2.4% in 2024; +0.8 pps from our last full survey in June 2024 and +0.3 pps from the September 2024 flash poll. For 2025, the median real GDP forecast is 1.9%, 0.1 pps lower from the June survey. Almost 50% of our economists put the probability of recession from 0% to 15%. The top factors impacting U.S. economic growth are the U.S. labor market, U.S. trade policy, and U.S. monetary policy. U.S. trade policy also shows up near the top in both upside and downside risks to the economy.
The full report can be found here.
