Moody’s Mark Zandi Foresees Three Fed Rate Cuts by June Amid Job Weakness, Politics

• Job market weakness persists into 2026, forcing faster Fed easing despite Wall Street’s slower expectations.

• Companies delay hiring due to trade and immigration policy uncertainties, keeping unemployment elevated.

• CME FedWatch Tool shows markets pricing only two cuts, while Fed dot plot signals just one in 2026.

Fed rate cuts 2025: Mark Zandi forecasts three by June amid job woes & politics. Bullish for Bitcoin? Explore impacts on crypto markets & trading opportunities now!

What Fed rate cuts 2025 does Mark Zandi predict?

Fed rate cuts 2025 are expected to total three reductions before June, according to Mark Zandi, chief economist at Moody’s Analytics. Each cut would measure 0.25 percentage points, accelerating easing to counter job market softness. This outlook diverges from market consensus anticipating a more gradual approach.

Why does unemployment rise trigger earlier Fed rate cuts?

Mark Zandi highlights that businesses remain cautious on hiring due to recent shifts in trade and immigration policies. This hesitation sustains weak job growth into early 2026, pushing unemployment higher. As Zandi notes, “Until then, job growth will remain insufficient to forestall further increases in unemployment, and as long as unemployment is on the rise, the Fed will cut rates.”

CME FedWatch data, derived from futures traders, currently prices in only two cuts: one potentially in April and another near September. In contrast, the Federal Reserve’s December dot plot indicates just one cut for all of 2026, lacking strong consensus among officials. FOMC minutes from December reveal the recent cut was narrowly decided, with limited appetite for aggressive easing.

Frequently Asked Questions

Will Fed rate cuts 2025 boost Bitcoin and crypto prices?

Fed rate cuts 2025 could provide a tailwind for Bitcoin by increasing market liquidity and reducing the appeal of low-yield safe havens. Historically, post-2020 rate reductions correlated with Bitcoin surpassing $60,000. Zandi’s faster-cut scenario may encourage capital rotation into crypto assets seeking higher returns.

How do Fed rate cuts impact cryptocurrency markets?

Fed rate cuts lower borrowing costs and boost investor risk appetite, often driving capital into speculative assets like cryptocurrencies. Natural language analysis shows markets historically rally 20-50% in the six months following initial cuts, per data from past cycles involving the Federal Reserve.

Key Takeaways

• Three cuts by June: Zandi’s forecast exceeds market pricing of two, signaling aggressive Fed response to labor data.
• Political influence rising: Trump’s appointees, including potential new Fed chair post-May, amplify pressure for lower rates.
• Crypto opportunity: Enhanced liquidity from Fed rate cuts 2025 positions Bitcoin for potential gains amid risk-on sentiment.

Conclusion

Mark Zandi’s prediction of Fed rate cuts 2025 underscores vulnerabilities in the job market and escalating political dynamics at the Federal Reserve. With three anticipated reductions by June amid unemployment pressures and Trump’s growing sway over FOMC appointments, markets may pivot toward riskier assets. Fed rate cuts impact on crypto historically favors Bitcoin rallies; investors should monitor upcoming FOMC meetings for confirmation of this dovish path.

Unemployment rise and weak hiring pace trigger early cuts

Persistent business reluctance to expand payrolls, rooted in policy instability, ensures subpar job creation. This dynamic elevates unemployment risks, compelling the Fed to act preemptively per Zandi’s analysis.

Trump’s control of Fed appointments adds more pressure

President Trump’s influence intensifies with three current governors—Christopher Waller, Michelle Bowman, and Stephen Miran—his appointees. As Miran’s term ends in January and Jerome Powell’s chairmanship concludes in May, new low-rate advocates could dominate. Zandi warns, “Federal Reserve independence will steadily erode as the president appoints more members to the Federal Open Market Committee.” Midterm elections may further amplify calls for stimulus, with the next FOMC gathering January 27-28 showing slim 13.8% cut odds via CME data.

In the broader context, such monetary easing historically supports cryptocurrency valuations. Lower rates diminish fixed-income attractions, channeling funds into high-growth sectors like digital assets. Bitcoin, as a macro-sensitive asset, has demonstrated resilience and upside in prior dovish Fed eras, positioning it favorably if Zandi’s timeline materializes.

Fed officials’ caution stems from mixed inflation signals, but Zandi views labor indicators as paramount. Companies prioritize stability post-policy shifts, delaying investments. This conservative stance aligns with broader economic reports from Moody’s Analytics, emphasizing sustainable growth over hasty expansions.