Odds Now At 70% (Somewhat Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 70% (somewhat likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

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Tariff Worries

The NASDAQ Composite Index ended the week at 15,587.79, down 22.73% from its December 16, 2024 record-high of 20,173.89: 🐻 Bear market.📉

Meanwhile, the DJIA and S & P 500 Indexes slipped closer to bear-market territory; both ended the week in the correction zone.

Investors have responded to the current administration's expanding tariff war.

Some A+ insights from a recent Fortune.com article:

"...The biggest winners from the tariffs, [Ford CEO Jim Farley] suggested, won’t be domestic automakers but Asian rivals that would face little additional impact..."

"...With 25% increases in the cost of parts, inflation would surge in maintenance and repair and insurance, which vehicle owners are already struggling to handle..."

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• And here's a detailed "Tariff Timeline" compiled by the superlative folks at USA Today.
  

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DOGE Dismissals

Job cuts surged last month.

Total layoffs rose from a massive 172,017 cuts during February, to a whopping 275,240 during March of this year...😓

 

DOGE-related terminations were 216,670... ▽ CHARTS ▽

CHART: Job Cuts - March 2025 UPDATE
Copyright © 2025 Challenger, Gray and Christmas, Inc.

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CHART: Job Cuts by Reason - March 2025 UPDATE
Copyright © 2025 Challenger, Gray and Christmas, Inc.

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Stay tuned...

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The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

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SUMMARY

• Current odds the U.S. Prime Rate will continue at the current 7.50% after the May 7^TH, 2025 FOMC monetary policy meeting: 70% (somewhat likely.)

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Odds Now At 90% (Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

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Tariffs and Job Cuts

Here's a clip from the February, 2025 Leading Economic Index:

"...Given substantial policy uncertainty and the notable pullback in consumer sentiment and spending since the beginning of the year, we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025.'..."

Two percent is too generous.

The repercussions from #POTUS47's tariffs, and layoffs from DOGE, have yet to be fully felt in the American economy.

The Federal Reserve's estimate of a +1.7% change in real GDP for 2025 is a bit more realistic.

The www.FedPrimeRate.com estimate for 2025 real GDP: Flat to +0.7%.

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Meanwhile, the tech-heavy NASDAQ Composite Index ended the week in correction territory, again.

 

Stay tuned...

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The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will continue at the current 7.50% after the May 7^TH, 2025 FOMC monetary policy meeting: 90% (likely.)

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