The trend in short-term rates leading up to the U.S. presidential election usually persists.
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Short-term U.S. interest rates are likely to be lower on Inauguration Day in 2025 than they are now, and that means the U.S. Federal Reserve almost certainly will continue to cut the benchmark federal funds rate at its December meeting.
This prediction is not based on any inflation forecasts or labor market trends. It instead is based on the strong historical tendency for the trend of short-term rates before the U.S. presidential election to continue for at least several months after. Since short-term rates are significantly lower today than where they stood at the beginning of this year, this historical pattern suggests that they will be lower still on January 20 — Inauguration Day.