Wells Fargo strategists expect the Federal Reserve to cut interest rates by 175 basis points by the end of 2025, creating an economic landscape that could present buying opportunities in the stock market., equity valuations became stretched and a pullback was overdue, said Scott Wren, Wells Fargo’s Senior Global Market Strategist.
However, Wells Fargo maintained that, based on their economic outlook through the end of 2025, market downturns in the SPX could generate buying opportunities. While Wrenn dismissed the idea of an emergency rate reduction, he does anticipate the Fed will reduce rates by a total of 100 basis points by the end of the year, starting with a 50 bps cut at the September policy meeting. He also expects an additional 75 bps of cuts in 2025.
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