Guggenheim expects the Fed to cut rates every quarter through 2025.

By Divya Chowdhury and Bansari Mayur Kamdar

DAVOS, Switzerland (Reuters) – The chief investment officer of Guggenheim Partners predicted on Monday that the U.S. Federal Reserve could cut interest rates every quarter by 2025, bringing the cut to 75 basis points, or a full percentage point, this year.

The Fed will continue to cut, albeit at a slower pace than expected, Guggenheim CIO Anne Walsh told Reuters at the start of the World Economic Forum’s annual meeting in Davos.

Traders were betting on just one Fed rate cut this year in the last few days, down from at least three a month ago for a second cut.

Walsh said the tariffs to be imposed by incoming President Donald Trump probably won’t be as punitive as expected, as long as the dollar has reserves and the US continues to attract capital.

Walsh expects tariffs to increase by an average of less than 10% across the board and be more country-oriented.

After a sharp bull run until 2022, the bond market is now in its third straight year of trading, Walsh says, and the volatility in it makes it interesting.

“If we get to 5% on the 10-year, that’s a lot, and that’s a very oversold position, a general buying opportunity,” Walsh said, adding that bond yield spreads are likely to remain tight, which would be good. US stocks.

Stocks will gain more from positive themes such as artificial intelligence (AI), energy and the resurgence of manufacturing in the United States, the S&P 500 said in 2025. Finally gives 8-10% income.

Walsh said there is some uncertainty about Trump’s policies and what his incoming administration will implement, as well as the risk that the U.S. economy will slow down more than currently predicted.

“It’s like a ping pong game … between politics and policy, and that creates a lot of volatility around our (investment) themes this year,” Walsh said.

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(Reporting by Div Chaudhuri in Davos and Bansari Mayur Kamdar; Editing by Alexander Smith)