What does Guggenheim's Anne Walsh predict about the Federal Reserve's interest rate decisions?

According to Walsh, the Federal Reserve is likely to cut interest rates again in December 2025 and potentially further in 2026 to support the slowing US economy.

Why does Walsh believe the Federal Reserve will adopt a lower neutral rate and implement additional rate cuts?

Walsh cites signs of economic weakness, particularly in the broader economy as reflected in the Fed Beige Book, as the key factors that will push the central bank to take a more dovish stance on monetary policy.

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Guggenheim Foresees More Fed Rate Cuts Ahead to Prop Up Slowing Economy

14 Nov

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Summary

Federal Reserve likely to cut rates again in December
Bifurcated economy with lower-income consumers and small businesses struggling
Guggenheim expects more rate cuts in 2026 as well

Guggenheim Foresees More Fed Rate Cuts Ahead to Prop Up Slowing Economy

According to Anne Walsh, the chief investment officer of Guggenheim Partners Investment Management, the Federal Reserve is likely to cut interest rates again in December 2025 amid mounting evidence of an economic slowdown. Walsh notes that the Fed Beige Book, which provides an overview of economic conditions, indicates "a lot more slowing and fraying around the edges" in the broader economy.

Walsh observes a "bifurcated economy" where lower-income consumers and small businesses appear to be struggling, while wealthier individuals and larger companies are prospering. This "two-speed economy" is reflected in the Beige Book's assessment of a "much more sluggish" overall economic landscape.