Source: Arab Trader 23/12/2024
HSBC analysts still expect further rate cuts from the US Federal Reserve in 2025, as they expect an overall cut of 75 basis points over the entire year; three consecutive cuts of 25 basis points at the March, June and September meetings. These expectations exceed the average expected by members of the US Federal Reserve as the Bank of England finds it strange that the Fed expects no further deterioration in the unemployment rate.
HSBC notes that a less aggressive easing policy by the US Federal Reserve supports the market, but earnings growth is expected to drive gains in US equities. HSBC enjoys a reputation in global markets and is known for implementing balanced banking strategies based on diversity in services and geographies. It places great emphasis on providing financial solutions to individuals and businesses in emerging markets, as this trend contributes to its sustainable growth.
HSBC, like other global banks, faces challenges associated with economic and geopolitical transformations. With market volatility, the bank must adapt to economic developments in major economies.
such as the United States, China, and Europe. HSBC is also facing increasing regulatory pressures that come with the complexity of international financial markets. However, opportunities remain, especially with the growing demand for digital financial services and investment in growth markets.
HSBC strives to adopt sustainable banking practices. The Bank implements programs aimed at supporting environmental sustainability and reducing environmental impact. It also commits to encouraging investment in projects that contribute to achieving the Sustainable Development Goals.
such as investing in renewable energy and projects that preserve the environment.
Expectations for earnings, especially outside of the big stocks known as the “Big Seven,” are low, putting fewer barriers to exceeding expectations. As for the US dollar, HSBC expects the dollar to continue to strengthen.
as other central banks may adopt more aggressive easing policies.
which will contribute to strengthening the dollar through the attractive interest rate differential
HSBC’s forecast for 2025 points to an uncertain economic environment that holds many opportunities and challenges. The US Federal Reserve is expected to take additional steps to cut interest rates.
which places the market in a sensitive position. These cuts will stimulate economic growth but may also raise concerns about their effects on the stability of financial markets. The important question remains whether the Fed can balance growth with maintaining unemployment rates low without negatively affecting inflation.
HSBC expects earnings growth to support US equities, especially with continued backing from relatively accommodative monetary policy. However, expectations for earnings outside major companies remain limited. Regarding the US dollar, its strength should continue in 2025 as other central banks likely adopt more aggressive easing policies.
which will strengthen the dollar and provide it with a comparative advantage over other currencies.
However, the outlook remains governed by several economic and geopolitical variables.
which may directly affect the course of the US Federal Reserve and monetary policies globally. Therefore, continuous analysis and close monitoring of the markets will be essential for investors and decision-makers in the face of these shifts.
