Weekly Forecasts 5/2025

Update on the most stable banks in the U.S.

Forecasts

1. Central Banks are taking different paths.

2. China did it again.

3. 100 most stable banks.

Some hold, some cut

The first central bank meetings of 2025 reveal a growing divergence in monetary policy across major economies, in stark contrast to last year’s more unified approach toward cautious rate cuts. In the United States, the Federal Reserve has chosen to keep its benchmark interest rate in the 4.25%-4.50% range, indicating no immediate rush to ease further. This reflects its lack of confidence in the strength of the labor market and a desire to see clearer evidence that inflation is moving back toward target before making another cut. However, there is a possibility we stay in the 4% range this year, given the challenges ahead. Based on the investor sentiment, the futures implied interest rates will follow the trajectory below. If this manifests, the rates will go below 4%, around Q3-Q4, and stay elevated through the next two years, very far from the pre-hike levels.

Source: Eikon, LSEG