Norada Real Estate Investments

  • Home
  • Markets
  • Properties
  • Membership
  • Podcast
  • Learn
  • About
  • Contact

Interest Rates Predictions for the Next 3 Years: 2025-2027

July 12, 2025 by Marco Santarelli

Interest Rate Predictions for the Next 3 Years: 2025, 2026, 2027

Are you trying to figure out what the future holds for our wallets is always top of mind. And right now, one of the biggest questions that keeps popping up is: what's going to happen with interest rates in 2025, 2026, and 2027? Well, based on what I'm seeing and digging into, it looks like interest rates are likely to gradually decrease over the next three years from the current federal funds rate of 4.25%-4.50% in mid-2025, potentially settling somewhere between 2.25% and 3.1% by mid-2027.

This easing is expected as inflation continues to cool down and the economy navigates various domestic and global factors. Let's dive deeper into what's driving these predictions and what it could mean for you and me.

Interest Rates Predictions for the Next 3 Years: 2025, 2026, 2027

Where We Stand Now: Mid-2025

Think back to the last couple of years. We saw some pretty significant hikes in interest rates as the Federal Reserve (or the Fed, as it's often called) tried to get a handle on inflation. It definitely made things more expensive for a lot of us, from taking out a mortgage to even using our credit cards.

But fast forward to mid-2025, and the picture is starting to shift. The Fed actually began to ease things up a bit in late 2024, bringing the federal funds rate down by a full percentage point from its peak of 5.25%-5.50%. As of June 2025, inflation, as measured by the Personal Consumption Expenditures (PCE) index, has come down to around 2.7%, which is getting closer to the Fed's target of 2%. However, and this is important, core inflation (which takes out those often-swinging food and energy prices) is still a bit higher at 2.8%. This is why the Fed is probably still being a little cautious.

In their fourth meeting of 2025 in June, they decided to hold rates steady. According to their Summary of Economic Projections (SEP) from that meeting, the median forecast is for the federal funds rate to be around 3.9% by the end of 2025. That suggests we might see a couple more small rate cuts (around 0.25% each) before the year is out. They're also expecting the economy to grow a bit slower in 2025 (around 2.0%) compared to 2024 (2.8%), and unemployment might tick up slightly to 4.4%. All of this sets the stage for what could be a pretty measured approach to interest rates over the next few years.

What's Going to Shape Interest Rates?

There are a bunch of moving parts that will play a role in where interest rates go from here. It's not just one thing, but a combination of factors that economists like myself keep a close eye on.

  • The Inflation Puzzle: This is probably the biggest piece of the puzzle. The Fed's main job is to keep prices stable, and they aim for that 2% inflation target. Most forecasts I've seen suggest that inflation will continue to come down, maybe to around 2.2% in 2025 and hitting that 2% mark by 2027. But, and there's always a but, things like new tariffs, ongoing global tensions, or disruptions in the supply chain could cause prices to go back up. For example, I remember reading the minutes from the Fed's May 2025 meeting, and they specifically mentioned that tariffs could significantly increase inflation in both 2025 and 2026. That kind of uncertainty is definitely something to watch.

Graph Showing Projected Inflation Rates from 2025 to 2027

  • The Economy and Jobs: The Fed also wants to see as many people employed as possible. Right now, the economy is expected to slow down a bit, with GDP growth maybe around 1.7% in 2026 before picking up again in 2027. Unemployment has been pretty steady, hanging around 4%-4.2% since mid-2024. If the economy slows down too much, the Fed might be more inclined to cut rates to try and boost things. A strong job market, on the other hand, gives them more flexibility.
Graph Showing GDP Growth vs. Unemployment rates from 2025 to 2027
This scatter plot illustrates the relationship between GDP growth and unemployment rates from 2025 to 2027
  • Trade and Government Policies: You can't talk about the economy without mentioning what the government is doing. Policies related to trade, especially tariffs being proposed, could really throw a wrench in the works. Tariffs often lead to higher prices for consumers, which makes the Fed's job of controlling inflation even harder. I've also seen some legal challenges to these tariffs, which adds another layer of unpredictability. Then there are fiscal policies – things like tax cuts or increased government spending. These can sometimes stimulate economic growth but might also fuel inflation, which the Fed would then have to respond to with interest rate adjustments.
  • What's Happening Around the World: We don't live in a bubble, and what other countries are doing with their monetary policy matters too. It looks like other major central banks, like the European Central Bank and the Bank of England, are also expected to ease their rates. This global trend could put some downward pressure on US rates as well. However, if some countries, like Japan, were to start raising their rates, it could create some volatility in the global financial markets.
  • The Market's Take: It's always interesting to see what the financial markets are predicting. What people who are buying and selling bonds and other financial instruments expect can also influence actual rates. I've noticed that some analysts think the peak interest rate we'll see in this cycle might be higher than what others are predicting for the long run. You see a lot of this discussion online, for example, on platforms like X, where some folks are even anticipating rates to fall to around 3.25%-3.50% by the end of 2025.

Looking Ahead: Interest Rate Forecasts (2025-2027)

Interest Rate Predictions Chart

Now, let's get into some specific numbers. Keep in mind that these are just forecasts, and things can change pretty quickly in the world of economics. But based on a variety of expert opinions and projections, here's a general idea of where interest rates might be headed:

2025: Taking it Slow

  • Federal Funds Rate: The Fed itself is projecting around 3.9% by the end of the year, which, as I mentioned, suggests a couple of small cuts. Some analysts, like those at Morningstar, are a bit more optimistic and think we could see rates in the 3.50%-3.75% range, anticipating maybe three cuts due to lower inflation and slower growth. BlackRock seems to think rates will get to around 4% and then might pause to see how the inflation and jobs data look.
  • 10-Year Treasury Yield: This is a key benchmark for many other interest rates. Morningstar is predicting an average of around 3.25% by 2027, and they think we'll probably see yields in the 3.5%-4% range in 2025.
  • 30-Year Mortgage Rate: If you're thinking about buying a home, this is a big one. Forecasts for 2025 seem to suggest mortgage rates will stay relatively high, maybe averaging between 6.3% and 6.8%. Fannie Mae is predicting around 6.3% by the end of the year, and Realtor.com is expecting something similar, around 6.2%.

Graph Depicting Projected 30-Year Mortgage Rates for the next 3 years (2025-2027)

  • Key Things to Watch: How quickly inflation cools down, whether the economy slows as expected, and what happens with those potential tariffs will be the main drivers this year.

2026: More Downward Movement

  • Federal Funds Rate: By the end of 2026, the Fed's current projection is around 3.4%. Morningstar is again a bit more aggressive, forecasting a range of 2.50%-2.75%, believing that inflation will keep falling and there will be more concerns about the economy. TD Economics is in line with the Fed at 3.4%.
  • 10-Year Treasury Yield: Most predictions have this stabilizing somewhere between 3.25% and 3.5%.
  • 30-Year Mortgage Rate: There's a wider range of forecasts here, from about 5.5% to 6.2%. Morningstar is on the lower end at around 5.0%, while Wells Fargo anticipates rates might still be above 6.4%.
  • Key Things to Watch: Whether inflation gets closer to that 2% target, if GDP growth continues to slow to around 1.7% as expected, and if the unemployment rate stays relatively stable around 4.3%.

2027: Finding a New Normal?

  • Federal Funds Rate: Looking further out to the end of 2027, the Fed's median projection is around 3.1%. Morningstar is still anticipating lower rates, in the 2.25%-2.50% range, and S&P Global Ratings is forecasting around 2.9%.
  • 10-Year Treasury Yield: Most likely to settle somewhere between 3% and 3.25%.
  • 30-Year Mortgage Rate: Predictions here range from Morningstar's forecast of 4.25%-4.5% to others suggesting around 4.75%-5.0%.
  • Key Things to Watch: If inflation stays at that 2% level, if GDP growth stabilizes around 1.8%, and if the global trend of easing monetary policy continues.

Here's a quick summary table:

Metric End of 2025 Forecasts End of 2026 Forecasts End of 2027 Forecasts
Federal Funds Rate 3.50% – 3.9% 2.50% – 3.4% 2.25% – 3.1%
10-Year Treasury Yield 3.5% – 4% 3.25% – 3.5% 3% – 3.25%
30-Year Mortgage Rate 6.2% – 6.8% 5.0% – 6.4% 4.25% – 5.0%

What This Means for You and Me

These potential shifts in interest rates can have a real impact on our everyday lives:

  • For Homebuyers: If mortgage rates do come down to the 6%-6.5% range in 2025 and maybe even to 4.75%-5% by 2027, it could definitely make buying a home more affordable. However, we also need to remember that high home prices and a limited number of houses for sale are still big challenges. While lower rates might help with monthly payments, it's unlikely we'll see a return to the really low rates of the past.
  • For Borrowers: If you have a car loan, you might see those rates edge down a bit too, maybe from around 7.53% in 2024 to around 7% in 2025. And credit card interest rates, which can be pretty hefty, might also fall slightly. Lower borrowing costs can provide some financial relief, but again, they're likely to stay above pre-pandemic levels.
  • For Savers: If you've been enjoying the higher yields on savings accounts lately (some have been offering 4%-5% in 2025), you might see those rates come down to 2.5%-3% by 2027 as overall interest rates decline.
  • For Investors: Lower interest rates can sometimes be good for the stock market because it reduces borrowing costs for companies. However, bond investors might want to think about shorter-term bonds or a strategy called laddering to manage the risk of rates potentially going up unexpectedly.

Things That Could Change the Course

It's important to remember that these are just predictions, and there are several things that could throw these forecasts off:

  • Inflation Sticking Around: If those tariffs or other issues cause inflation to stay higher than expected, the Fed might have to hold off on cutting rates or even raise them again.
  • A Sharper Economic Downturn: If the economy slows down more than anticipated, the Fed might need to cut rates more aggressively to try and prevent a recession.
  • Shifts in Government Policy: Changes in trade or fiscal policy could force the Fed to rethink its strategy.
  • Global Events: Unexpected political or economic events around the world can also have a ripple effect on US interest rates.

Final Thoughts

Based on everything I'm seeing, the most likely path for interest rates over the next three years is a gradual decline. The Federal Reserve seems to be aiming for a delicate balance, trying to bring inflation down to its target while also supporting economic growth. For us regular folks, this could mean some relief in borrowing costs down the road, although we probably won't see a return to the very low rates we experienced in the past.

Of course, the economic road ahead is rarely smooth, and there will likely be some bumps along the way. That's why it's so important to stay informed, keep an eye on what the Fed is doing and saying, and maybe even chat with a financial professional to make sure you're making the best decisions for your own situation. As Federal Reserve Chair Jerome Powell himself said back in March 2025, their approach will continue to depend on the data they see coming in. So, while forecasts can give us a general direction, the actual path of the economy is never set in stone.

Recommended Read:

  • Market Reactions: How Investors Should Prepare for Interest Rate Cut
  • Interest Rate Predictions for the Next 10 Years: 2025-2035
  • Interest Rate Predictions for Next 2 Years: Expert Forecast
  • Interest Rate Predictions for the Next 12 Months
  • Interest Rate Forecast for Next 5 Years: Mortgages and Savings
  • When is the Next Fed Meeting on Interest Rates?
  • Interest Rate Cuts: Citi vs. JP Morgan – Who is Right on Predictions?
  • More Predictions Point Towards Higher for Longer Interest Rates

Filed Under: Economy, Financing Tagged With: Economy, Interest Rate Forecast, Interest Rate Predictions, interest rates

Interest Rates Predictions for the Next 2 Years by Goldman Sachs

July 12, 2025 by Marco Santarelli

Interest Rates Forecast for 2 Years by Goldman Sachs: 2025-2026

Do you want to know where interest rates are projected in the next two years? Based on their recent analysis, Goldman Sachs Research anticipates the Federal Reserve might initiate interest rate cuts as early as September 2025. This represents a shift from their previous forecast, driven by a combination of factors, including the surprisingly limited impact of tariffs and emerging signs of a softening labor market. But what does this really mean for you and the economy? Let's dive deeper.

Interest Rates Predictions for the Next 2 Years by Goldman Sachs

Why the Shift? Unpacking Goldman Sachs' Revised Forecast

As a plain speaker, it's important to analyze why these big firms are revising their outlooks. It's never just a hunch, it's based on a lot of research and factors at play. Goldman Sachs Research has adjusted their predictions for a few key reasons:

  • Tariff Impact Lower Than Expected: Many feared that tariffs on goods would lead to broad price increases, fueling inflation. However, initial data suggest the actual inflationary impact has been less pronounced than anticipated. Maybe companies are absorbing some of the costs, or global supply chains are finding ways to adapt.
  • Stronger Disinflationary Forces: Disinflation simply means the rate of inflation is slowing down, and there seem to be forces pulling inflation down. This could include increased productivity, technological advancements, or simply a change in consumer spending habits.
  • A Potentially Softening Job Market: While unemployment rates remain low, there are whispers that the job market isn't as rock-solid as it appears. Goldman Sachs notes that while the labor market still looks healthy, it has become hard to find a job. This softening could prompt the Fed to ease monetary policy to support economic growth.

The Fed's Stance: A Balancing Act

The Federal Reserve has a tricky job. They need to balance keeping inflation under control with ensuring that the economy doesn't slip into a recession. Think of it like walking a tightrope – too much tightening (raising rates) could stifle growth too little tightening on the other hand leads to inflation. If inflation is easing and the job market is cooling, it gives the Fed more room to maneuver and potentially lower interest rates.

Goldman Sachs believes the Fed might share their view that the tariff's impact will be short-lived and only influence the price levels once.

What's the Timeline? Goldman Sachs' Rate Cut Expectations

Here's where it gets specific. Goldman Sachs currently projects the following:

  • September 2025: Initial 25-basis-point rate cut
  • October 2025: Another 25-basis-point rate cut
  • December 2025: A third 25-basis-point rate cut
  • March 2026: Continued easing with a 25-basis-point cut.
  • June 2026: Another 25-basis-point reduction.

In total, they're forecasting a terminal rate (the lowest point for interest rates) of 3-3.25%, a decrease from their previous estimate of 3.5-3.75%.

Could They Be Wrong? The Caveats and Uncertainties

It's crucial to remember that these are just predictions. Economic forecasting is notoriously difficult, and numerous factors could throw a wrench into the works. Think about it: a sudden geopolitical event, a spike in energy prices, or an unexpected surge in inflation could all alter the Fed's course.

  • Data Dependency: The Fed has consistently emphasized that its decisions will be data-dependent.
  • Unforeseen Events: Who could have predicted the COVID-19 pandemic and its massive impact on the economy? Black swan events can quickly change the picture and throw all forecasts overboard.

The Implications: What Does This Mean for You?

So, how might these potential interest rate cuts affect your finances and savings?

  • Mortgages: Lower interest rates could translate to lower mortgage rates, making it more affordable to buy a home or refinance an existing mortgage. Good news for potential home buyers and those looking to lower their monthly payments.
  • Savings Accounts: On the flip side, lower interest rates typically mean lower yields on savings accounts and certificates of deposit (CDs). This could make it harder to generate income from savings.
  • Investments: The impact on the stock market is complex and often depends on sentiment. Lower rates can sometimes boost stock prices, but it also depends on how investors interpret the overall economic environment.

My Take: Hope for the best, prepare for the worst

As someone deeply involved in following economic trends, my perspective leans towards cautious optimism. While Goldman Sachs' revised forecast is encouraging, it's important to stay grounded and understand that the economic future remains uncertain. Prepare yourself by diversifying your investments, reducing debt, and having some liquid savings on hand. Don't make any drastic decision based solely on one forecast by anybody, including Goldman Sachs.

Final Thoughts: The potential for interest rate cuts in 2025 offers a glimmer of hope for a more favorable economic outlook. However, remaining informed, adaptable, and prepared for various outcomes is crucial for navigating the ever-changing financial environment.

Plan Smart Around Rate Forecasts – 2025 & 2026

With Goldman Sachs projecting interest rate shifts through 2025–2026, now is the time to lock in investment-grade real estate.

Norada offers high-yield turnkey properties designed to deliver stable cash flow and long-term equity growth—regardless of rate movements.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now 

Recommended Read:

  • Interest Rate Predictions for the Next 2 Years Ending 2027
  • Interest Rate Predictions for 2025 and 2026 by Morgan Stanley
  • Interest Rates Predictions for the Next 3 Years
  • Market Reactions: How Investors Should Prepare for Interest Rate Cut
  • Interest Rate Predictions for the Next 10 Years: 2025-2035
  • Interest Rate Predictions for the Next 12 Months
  • Interest Rate Forecast for Next 5 Years: Mortgages and Savings
  • When is the Next Fed Meeting on Interest Rates?
  • Interest Rate Cuts: Citi vs. JP Morgan – Who is Right on Predictions?
  • More Predictions Point Towards Higher for Longer Interest Rates

Filed Under: Economy, Financing Tagged With: Economy, Interest Rate Forecast, Interest Rate Predictions, interest rates

Interest Rate Predictions for 2025 and 2026 by Morgan Stanley

July 8, 2025 by Marco Santarelli

Interest Rate Predictions for 2025 and 2026 by Morgan Stanley

If you're wondering what the future holds for interest rates, especially in the next couple of years, you're not alone. According to insights from Morgan Stanley, as discussed in a recent “Thoughts on the Market” podcast, interest rate predictions point towards the Federal Reserve cutting rates, but potentially later and more aggressively than the market currently anticipates.

While the market prices in roughly 100 basis points of cuts by the end of 2026, Morgan Stanley's economists foresee up to 175 basis points, beginning in early 2026. This article will break down their reasoning, explore the key economic factors at play, and discuss the potential implications for investors.

Interest Rate Predictions 2025-2026 by Morgan Stanley: A Deep Dive

The Fed's Tightrope Walk: Inflation vs. Economic Growth

The Federal Reserve's primary job is to manage inflation and promote maximum employment. These two goals often pull in opposite directions. Right now, they're trying to figure out where to strike that balance.

The recent Federal Open Market Committee (FOMC) meeting highlighted this balancing act. While the Fed decided to hold the federal funds rate steady (remaining within its target range of 4.25 to 4.5 percent), their projections suggest two rate cuts by the end of 2025, followed by fewer cuts in 2026 and 2027. Think of it like driving a car – you want to keep it steady, but sometimes you need to tap the brakes or the gas to avoid a crash.

Why Morgan Stanley Expects the Fed to Cut “Late, but More”

Morgan Stanley's perspective, particularly that of U.S. Economist Michael Gapen, is that the Fed will be patient before easing monetary policy, but when they do move, they'll do so with more force than some are anticipating. Here's a breakdown of their reasoning:

  • Tariffs: Tariffs, the taxes on goods imported from other countries, introduce some tricky timing issues. They can initially push inflation higher because businesses often pass those costs onto consumers. This increase in prices can curb consumer spending. Gapen believes the Fed will first observe the inflationary effects before feeling the impact of slowing consumer activity.
  • Immigration: Changes in immigration policy also play a role. Reduced immigration means lower growth in the labor force. So, even if the overall economy slows down, The unemployment rate might not increase as much as expected. This is because there are fewer people entering the job market. The Fed will likely see inflation now, followed by a weaker labor market later, according to Morgan Stanley.
  • Fiscal Policy: Don't expect a huge boost to the economy from government spending. Current fiscal policies are not expected to lead to a big boost to growth, so the Fed can’t rely on that.

Putting it all together, Morgan Stanley believes the Fed will see inflation first and then a weaker economy. Therefore, the Fed will want to be sure that any increase in inflation is under control.

Tariffs: The Elephant in the Room

Tariffs were mentioned almost 30 times during the FOMC press conference, signaling their significant impact on the Fed's thinking. The Fed seems to be operating under the assumption of about a 14 percent effective tariff rate. According to Gapen, you can see the impact of tariffs on the Fed's forecast in three ways:

  • Higher Inflation: The Fed expects inflation to move higher, especially during the summer months. As a result, they've revised their inflation forecasts upward to about 3.0% for headline PCE (Personal Consumption Expenditures) and 3.1% for core PCE.
  • Transitory Inflation: The Fed seems to believe that the inflationary effects of tariffs will be temporary, expecting inflation to fall back toward their 2% target in 2026 and 2027.
  • Slower Economic Growth: The Fed acknowledges that tariffs will likely slow down economic growth, leading them to revise their outlook for real GDP growth downward.

Geopolitics and Oil Prices: Throwing a Wrench into the Works?

The Middle East conflict, while mentioned only a few times in the FOMC press conference, adds another layer of complexity. A spike in oil prices due to geopolitical tensions could further complicate the Fed's job.

Historically, a 10% rise in oil prices (another $10 increase) can lead to a 30 to 40 basis point increase in the year-on-year rate of headline inflation. However, the evidence suggests limited second-round effects and almost no change in core inflation.

In other words, you might see a short-term jump in gas prices, which contributes to overall inflation, but it's unlikely to create a sustained inflationary cycle. Higher gas prices do eat into consumer purchasing power, reinforcing the likelihood of slower economic growth.

Market Pricing vs. Morgan Stanley's Predictions: A Disconnect

It must be remembered that market prices are merely an average across the different paths various investors believe are most likely. The fact that market prices reflect about 100 basis points of cuts by the end of 2026, contrasting with Morgan Stanley's forecast of 175 basis points, highlights a significant difference in expectations. The market is also pricing in some rate cuts for the current year, while Morgan Stanley anticipates the first cuts in early 2026.

This disconnect creates opportunities for investors who align with Morgan Stanley's view.

Yield Curve Implications: Lower Treasury Yields Ahead?

Morgan Stanley projects Treasury yields to move lower, starting in the fourth quarter of this year, aligning with their expected timing of the Fed's first rate cuts in early 2026. They anticipate the 10-year Treasury yield to end this year around 4% and end 2026 closer to 3%.

While the timing of this decline is subject to change, their conviction lies in the direction—lower yields are likely ahead. This suggests investors should start preparing for lower Treasury yields now.

The U.S. Dollar: Heading South?

Morgan Stanley expects the U.S. dollar to depreciate another 10% over the next 12 to 18 months, building on the roughly 10% decline it experienced in the first six months of the current year.

Geopolitical events, particularly those impacting energy prices, could influence this outlook. A significant rise in crude oil prices could benefit countries that are net exporters of oil and hurt those that are net importers. While the U.S. is somewhat neutral in this regard, a surge in energy prices could lead to a temporary pause in the dollar's depreciation.

My Take: Navigating Uncertainty with Informed Decisions

Predicting the future is a fool's errand, especially when it comes to something as complex as interest rates. However, analyzing the viewpoints of economic experts like those at Morgan Stanley can give us a valuable perspective. Here's what I would focus on when investing:

  • Inflation Data: Closely monitor inflation reports, particularly the PCE index, to confirm whether inflation is indeed proving to be transient, as economists are expecting. Any deviation from this path may lead to significant revision in these predictions.
  • Employment Figures: Pay attention to revisions and trends related to employment rates. If there's contraction, the Fed’s hand might be forced to cut rates more than anticipated.
  • Global Factors: Stay informed about potential international developments. Since they impact the dollar, they indirectly also influence rates, inflation, and eventually growth.

Prepare for Interest Rate Shifts with Smart Real Estate Investments

As forecast by experts predict up to 175 basis points in interest rate cuts by 2026, the window for locking in profitable real estate investments is now.

Norada offers turnkey rental properties in stable, cash-flowing markets—helping you capitalize on today’s rates before they potentially drop further.

HOT NEW LISTINGS JUST ADDED!

Speak with a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now 

Recommended Read:

  • Interest Rates Predictions for the Next 3 Years: 2025-2027
  • Fed Projects Two Interest Rate Cuts Later in 2025
  • Market Reactions: How Investors Should Prepare for Interest Rate Cut
  • Interest Rate Predictions for the Next 10 Years: 2025-2035
  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Interest Rate Predictions for Next 2 Years: Expert Forecast
  • Interest Rate Predictions for the Next 12 Months
  • Interest Rate Forecast for Next 5 Years: Mortgages and Savings
  • When is the Next Fed Meeting on Interest Rates?
  • Interest Rate Cuts: Citi vs. JP Morgan – Who is Right on Predictions?
  • More Predictions Point Towards Higher for Longer Interest Rates

Filed Under: Economy, Financing Tagged With: Economy, Interest Rate Forecast, Interest Rate Predictions, interest rates

15-Year Mortgage Rate Forecast for the Next 5 Years: 2025-2029

July 7, 2025 by Marco Santarelli

15-Year Fixed Mortgage Rate Predictions for Next 5 Years: 2025-2029

Are you thinking about buying a home or refinancing your mortgage? If so, understanding where interest rates might be headed is crucial. So what's the definitive answer/statement on the 15-Year Mortgage Rate Forecast for the Next 5 Years? According to projections, we can expect a general downward trend in rates through 2028, followed by a gradual increase towards the end of the decade. While no one has a crystal ball, let's dive deep into a year-by-year breakdown based on current forecasts and the economic factors that could influence these rates, while trying to discuss all aspects that might interest you.

15-Year Fixed Mortgage Rate Forecast for the Next 5 Years: 2025-2029

Why the 15-Year Mortgage Matters

Before we jump into the numbers, let's quickly discuss why the 15-year mortgage is such a popular choice. It offers a sweet spot between the shorter 10-year term and the more common 30-year option. Here's a quick rundown:

  • Faster Equity Building: You pay off your home in half the time compared to a 30-year mortgage. Imagine owning your home outright in just 15 years!
  • Lower Interest Paid Over the Life of the Loan: Because you're paying it off faster, you save a significant amount on interest. This can translate to tens of thousands of dollars over the life of the loan.
  • Higher Monthly Payments: The tradeoff? Higher monthly payments. But if you can comfortably afford it, the long-term savings are well worth it.

Now, let's get to the main point of why you are here – Let's analyze the projected 15-year mortgage rates from 2025 to 2029 based on forecasts.

Year-by-Year 15-Year Mortgage Rate Forecast (2025-2029)

Alright, let's get down to the nitty-gritty. I've compiled a breakdown of the projected 15-year mortgage rates for the next five years based on projections from the Economy Forecast Agency (EFA) (Updated on 2025/07/03). Remember, these are forecasts, not guarantees, and unforeseen economic events can definitely throw things off course. Always consult with a financial advisor for personalized advice.

2025 Predictions: A Year of Initial Declines

  • Current (July 2025): 5.8%
  • July: 5.44-5.96% (Close: 5.61%) – A promising start with a drop.
  • August: 5.53-5.87% (Close: 5.70%) – A slight uptick.
  • September: 5.37-5.71% (Close: 5.54%) – Further decline.
  • October: 5.40-5.74% (Close: 5.57%) – Stability around the mid-5% range.
  • November: 5.18-5.57% (Close: 5.34%) – A more significant drop.
  • December: 4.99-5.34% (Close: 5.14%) – Finishing the year on a lower note.

Key Takeaway for 2025: The forecast suggests a consistent downward trend throughout the year, potentially driven by anticipated Federal Reserve actions to combat inflation. If you're looking to buy or refinance, the latter half of 2025 might present some favorable opportunities.

2026 Predictions: Continued Descent

  • January: 5.01-5.31% (Close: 5.16%) – Holding steady.
  • February: 4.98-5.28% (Close: 5.13%) – Minimal change.
  • March: 4.99-5.29% (Close: 5.14%) – Still hovering around 5%.
  • April: 4.76-5.14% (Close: 4.91%) – Breaking below 5%.
  • May: 4.63-4.91% (Close: 4.77%) – Continued decline.
  • June: 4.26-4.77% (Close: 4.39%) – A larger drop, signaling potentially bigger savings.
  • July: 4.17-4.43% (Close: 4.30%)
  • August: 4.10-4.36% (Close: 4.23%)
  • September: 4.07-4.33% (Close: 4.20%)
  • October: 4.04-4.28% (Close: 4.16%)
  • November: 3.95-4.19% (Close: 4.07%)
  • December: 3.80-4.07% (Close: 3.92%) – End year below 4%.

Key Takeaway for 2026: The trend continues downward, with rates potentially dipping below 4% by the end of the year. This could be a prime window for those looking to lock in a low rate.

2027 Predictions: Bottoming Out

  • January: 3.63-3.92% (Close: 3.74%) – Start year just below 4%.
  • February: 3.35-3.74% (Close: 3.45%) – Significant dip.
  • March: 3.30-3.50% (Close: 3.40%)
  • April: 3.39-3.59% (Close: 3.49%)
  • May: 3.48-3.70% (Close: 3.59%)
  • June: 3.41-3.63% (Close: 3.52%)
  • July: 3.42-3.64% (Close: 3.53%)
  • August: 3.33-3.53% (Close: 3.43%)
  • September: 3.24-3.44% (Close: 3.34%)
  • October: 3.07-3.34% (Close: 3.17%) – Lowest rates being seen by now.
  • November: 3.06-3.24% (Close: 3.15%)
  • December: 2.74-3.15% (Close: 2.82%) – Rates below 3%.

Key Takeaway for 2027: Rates continue to decline further to unbelievable lows. These lower rates reflect a potentially slow global economy and the lasting impacts of earlier monetary policies.

2028 Predictions: A Potential Turning Point

  • January: 2.69-2.85% (Close: 2.77%) – Continued lows.
  • February: 2.50-2.77% (Close: 2.58%)
  • March: 2.48-2.64% (Close: 2.56%)
  • April: 2.43-2.59% (Close: 2.51%)
  • May: 2.38-2.52% (Close: 2.45%) – Lowest rates.
  • June: 2.18-2.45% (Close: 2.25%) – Rates at rock bottom now.
  • July: 2.19-2.33% (Close: 2.26%)
  • August: 2.13-2.27% (Close: 2.20%)
  • September: 2.20-2.58% (Close: 2.50%) – Increase in rates.
  • October: 2.50-3.04% (Close: 2.95%) – Sharp rise.
  • November: 2.95-3.28% (Close: 3.18%)
  • December: 3.18-3.59% (Close: 3.49%) – Rates start to increase.

Key Takeaway for 2028: Significant volatility. Watch out for this year, as rates could start rising again as the economy picks up.

2029 Predictions: Gradual Increase

  • January: 3.46-3.68% (Close: 3.57%) – Increasing rates.
  • February: 3.57-3.85% (Close: 3.74%)
  • March: 3.70-3.92% (Close: 3.81%)
  • April: 3.73-3.97% (Close: 3.85%)
  • May: 3.85-4.14% (Close: 4.02%) – Rates at about 4%
  • June: 3.72-4.02% (Close: 3.83%) – Slight dip but still increasing.

Key Takeaway for 2029: Rates gradually increase. This could signify a strengthening economy.

Here's a quick table summarizing the year-end 15-Year Fixed Rate Mortgage forecasts:

Year Forecasted 15-Year Mortgage Rate (Year-End)
2025 5.14%
2026 3.92%
2027 2.82%
2028 3.49%
2029 3.83%

Factors Influencing Mortgage Rates: The Big Picture

It's not enough to just look at the numbers. You need to understand what influences them. Mortgage rates are complex and depend on a variety of factors, I would discuss the main ones here:

  • The U.S. Economy: A strong economy generally leads to higher interest rates because the demand for borrowing increases. Conversely, a weaker economy can lead to lower rates to stimulate borrowing and investment.As per the data available for the economy in July 2025, the US economic growth is expected to slow down in 2025, forecasts from organizations like Morgan Stanley and the IMF point to growth around 1.5% to 1.8%
  • Inflation: Inflation is a major player. When inflation is high, lenders demand higher interest rates to protect their returns.The annual inflation rate in the US stood at 2.4% in May 2025. The inflation is expected to have a downward trend partly due to the new tariffs.
  • Federal Reserve (The Fed): The Fed's monetary policy has a huge impact on interest rates. The Fed influences rates by setting the federal funds rate (the rate at which banks lend to each other overnight). Changes in this rate ripple through the economy, affecting mortgage rates.The Fed has been holding interest rates steady at a target range of 4.25% to 4.50% and is expected to shift in second half of 2025.
  • The Bond Market: Mortgage rates are often tied to the yield on the 10-year Treasury bond. When bond yields rise, mortgage rates tend to follow suit.The 10-year US Treasury yield reached 4.76% in February 2025, its highest level since November 2023.

My Personal Thoughts

Having watched the mortgage market for years, I've learned that predicting the future is tough! Economic cycles are unpredictable, and unexpected events (like global pandemics or geopolitical tensions) can throw even the most sophisticated models off track.

That said, I believe understanding the underlying factors is crucial. If inflation remains in check, and the Fed adopts a more dovish stance (meaning they're more inclined to lower rates to stimulate the economy), we could indeed see the lower rates that are being forecasted.

However, keep a close eye on the bond market. Any signs of rising bond yields could signal an increase in mortgage rates. And remember, the housing market itself plays a role. Strong housing demand can put upward pressure on rates.

Strategies for Homebuyers and Refinancers

So, what should you do with this information? Here are a few strategies:

  • If you're considering buying, don't try to time the market perfectly. Focus on finding a home you love and can afford. If rates do drop, you can always refinance later.
  • If you want to refinance, keep a close watch on the forecasts. If rates are projected to fall, you might want to wait. But don't wait too long, as markets can change quickly.
  • Consider locking in a rate. If you find a rate you're comfortable with, talk to your lender about locking it in. This protects you from potential rate increases.
  • Shop around for the best rates. Don't just settle for the first offer you receive. Get quotes from multiple lenders to ensure you're getting the best deal.
  • Work with a qualified mortgage professional. A good mortgage broker or lender can help you navigate the complexities of the market and find the right loan for your needs.

The Bottom Line

The 15-Year Mortgage Rate Forecast for the Next 5 Years suggests a period of declining rates, followed by a potential gradual increase. While these forecasts are valuable, it is important to remember not to hold any forecast as the ultimate truth and that the economy remains very uncertain and ever-changing. Understanding the factors that influence these rates and developing a sound financial strategy helps you make informed decisions about buying or refinancing your home and setting yourself up for financial success.

“Invest in Rental Income Properties”

With today's mortgage rates on the rise, investing in turnkey real estate can help you secure consistent returns.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now 

Related Articles:

  • 30-Year Fixed Mortgage Rate Forecast for the Next 5 Years
  • Fed Funds Rate Forecast 2025-2026: What to Expect?
  • Will Mortgage Rates Go Down in 2025: Morgan Stanley's Forecast
  • Mortgage Rate Predictions 2025 from 4 Leading Housing Experts
  • Mortgage Rates Forecast for the Next 3 Years: 2025 to 2027
  • Will Mortgage Rates Ever Be 3% Again in the Future?
  • Mortgage Rate Predictions for Next 5 Years
  • Mortgage Rate Predictions: Why 2% and 3% Rates are Out of Reach
  • How Lower Mortgage Rates Can Save You Thousands?
  • How to Get a Low Mortgage Interest Rate?
  • Will Mortgage Rates Ever Be 4% Again?

Filed Under: Economy, Financing, Mortgage Tagged With: 30-Year Mortgage Rates, Economy, Federal Reserve, interest rates, Monetary Policy, mortgage rates

US Job Growth Booms in June 2025 With Payrolls Exceeding Expectations

July 5, 2025 by Marco Santarelli

US Job Growth Booms in June 2025 With Payrolls Exceeding Expectations

The US job growth in June 2025 proved surprisingly strong, with nonfarm payrolls increasing by 147,000. This exceeded expectations of around 110,000 and prompted a shift in market expectations, essentially eliminating the possibility of a July interest rate cut by the Federal Reserve. But digging deeper, the report reveals a more nuanced picture, with government hiring largely fueling the growth and certain sectors still struggling.

US Job Growth Booms in June 2025 With Payrolls Exceeding Expectations

A Bird's-Eye View of the June Jobs Report

Let's break down the key takeaways from the June 2025 jobs report. It's easy to get caught up in the headline number, so let's explore below the good and not-so-good insights.

The Good News:

  • Payrolls Exceeded Expectations: The addition of 147,000 jobs signals continued, albeit moderating, economic activity.
  • Unemployment Rate Dipped: Falling to 4.1%, the lowest since February, suggests a tightening labor market.
  • Government Hiring Surged: A robust increase of 73,000 jobs in the government sector, particularly in state and local government fueled by education-related positions.
  • Healthcare Remains Strong: The Healthcare sector continues to be a reliable job creator, adding around 39,000 jobs.

The Not-So-Good News:

  • Drop in Labor Force Participation: The labor force participation rate fell to 62.3%, its lowest level since late 2022, indicating that people are leaving the workforce.
  • Household Survey Showed Weaker Gains: The household survey only showed a 93,000 job gain which is significantly lesser compared to nonfarm payrolls data of 147,000.
  • Uneven Distribution of Growth: Job gains were concentrated in a few sectors, while others saw little or no change.
  • Manufacturing Losses: This sector is very important and it lost 7,000 jobs.

Sector-Specific Insights: Where Are the Jobs Really Going?

It's essential to delve into which sectors are driving job growth. The June report highlighted some clear winners and losers:

  • Government: As mentioned, the government sector was the primary driver of job growth in June, adding 73,000 jobs. This makes up roughly half of all jobs.
  • Healthcare & Social Assistance: Adding a combined 58,000 jobs; these sectors continue to be pillars of job creation.
  • Construction: Saw a moderate increase of 15,000 jobs, possibly reflecting ongoing construction projects.
  • Manufacturing: The data paints a very dim picture by losing 7,000 jobs.

The Federal Reserve's Dilemma: Will They or Won't They Cut Rates?

The strong June jobs report has thrown a wrench into the Federal Reserve's plans for potential interest rate cuts. Prior to the report, there was some anticipation of a rate cut in July. However, the data practically eliminated that possibility, as traders priced in a significantly lower chance of a cut.

The Fed is walking a tightrope, balancing the need to combat inflation with the risk of slowing down economic growth. The jobs report provides conflicting signals. While the strong job gains suggest a resilient economy, the slowing labor force participation rate and uneven sectoral growth indicate potential underlying weakness.

For me, the Fed's decision hinges on the incoming data over the next few months. If inflation continues to moderate and economic growth remains stable, they may consider a rate cut later in the year. However, if inflation re-accelerates or the economy shows signs of significant slowing, the Fed will likely hold steady.

Impact on Financial Markets:

As you might expect, the financial markets reacted swiftly to the jobs report.

  • Stocks Rose: Equities experienced an upward tick.
  • Treasury Yields Increased: Treasury yields rose sharply, reflecting a shift in expectations for future interest rate hikes.
  • Rate Cut Odds Decreased: Market expectations for further rate cuts declined.

The Political Angle: Trump's Take on the Economy

As always, politics plays a role in how economic data is perceived and interpreted. President Trump has been vocal about the need for the Federal Reserve to lower interest rates, even going so far as to suggest that Fed Chair Jerome Powell should resign.

Trump's perspective is that lower interest rates would stimulate the economy and boost job growth. However, some economists fear that cutting rates prematurely could risk reigniting inflation. The interplay between the President's pronouncements and the Fed's independent decision-making adds an extra layer of complexity to the economic outlook.

Long-Term Trends and Challenges:

Looking beyond the immediate data, several long-term trends and challenges are shaping the US labor market:

  • The Aging Workforce: As the baby boomer generation retires, the labor force participation rate is likely to continue to decline.
  • Skills Gap: Many employers struggle to find workers with the skills needed for the jobs of the future, particularly in technology and healthcare.
  • Automation and AI: The increasing use of automation and artificial intelligence is likely to displace some jobs, while also creating new opportunities.

What This Means for You: A Personal Perspective

As someone who follows the economy closely, I believe the June jobs report provides a valuable, but incomplete, picture of the US labor market. While the headline number is encouraging, I think it's important to look behind the numbers and understand the underlying trends and challenges.

Here's what it means for you folks at home:

  • For Job Seekers: Focus on sectors with strong job growth, such as healthcare, social assistance, and government. Upskilling and reskilling can also help you improve your prospects, particularly in high-demand fields.
  • For Investors: Be cautious and diligent. Monitor economic data closely and adjust your investment strategy accordingly.
  • For Businesses: Continue to adapt to the changing labor market by investing in training and development for your employees and exploring new technologies.

Looking Ahead: Factors to Watch in the Coming Months:

These are some of the critical factors I'll be watching in the coming months:

  • Inflation Data: Will inflation start escalating again? I sure hope not.
  • Retail Sales and Consumer Spending: These figures are important because they reflect the overall health of the economy.
  • Federal Reserve Policy: Any hint that the Federal Reserve might shift direction remains of value.

In Conclusion: A Mixed Bag, Demanding Further Scrutiny

The US job growth in June 2025 was undeniably better than expected. But, it's crucial not to take the figures at face value. The details reveal a more complex story, with government hiring driving much of the growth and certain sectors facing challenges. With this information in mind, keep an open mind and stay informed.

Tap Into Real Estate While Job Growth Surges

With U.S. payrolls exceeding expectations in 2025, the strong job market is fueling housing demand—creating ideal conditions for property investors.

Norada connects you to turnkey rental properties in high-growth areas, helping you capitalize on rising demand and build passive income.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Read More:

  • US-Iran War: A New Threat to America's Shaky Economy
  • Bond Market Today and Outlook for 2025 by Morgan Stanley
  • The Risk of New Tariffs: Will They Crash the Stock Market and Economy?
  • Stagflation Alert: Economist Survey Predicts Weak Q1 GDP Due to Tariffs
  • Goldman Sachs Significantly Raises Recession Probability by 35%
  • 2008 Crash Forecaster Warns of DOGE Triggering Economic Downturn
  • Stock Market Predictions 2025: Will the Bull Run Continue?
  • Stock Market Crash: Nasdaq 100 Tanks 3.5% Amid AI Concerns
  • Stock Market Crash Prediction With Huge Discounts on Bitcoin, Gold, Houses
  • S&P 500 Forecast for the Next Year: What to Expect in 2025?
  • Stock Market Predictions for the Next 5 Years
  • Echoes of 1987: Is Today’s Stock Market Crash Leading to a Recession?
  • Is the Bull Market Over? What History Says About the Stock Market Crash
  • Wall Street Bear Predicts a Historic Stock Market Crash Like 1929
  • Economist Predicts Stock Market Crash Worse Than 2008 Crisis
  • Next Stock Market Crash Prediction: Is a Crash Coming Soon?
  • Stock Market Crash: 30% Correction Predicted by Top Forecaster

Filed Under: Economy Tagged With: Economy, Job Growth, Jobs, Nonfarm Payrolls

Will AI Take Your Job: Fed Chair Jerome Powell’s Cautious Warning

July 5, 2025 by Marco Santarelli

Will AI Take Your Job: Fed Chair Jerome Powell's Cautious Warning

Is artificial intelligence (AI) poised to steal our jobs? That's the burning question on many minds, and Federal Reserve Chair Jerome Powell has weighed in. While the full impact remains uncertain, Powell warns that AI will make “significant changes” to the economy and labor market, potentially displacing jobs before creating new opportunities. So, it's not a simple yes or no, but rather a complex shift we need to understand and prepare for.

The rise of AI isn't just some sci-fi fantasy anymore; it's rapidly becoming a reality across various industries. We're seeing AI tools automating tasks once done by humans, from writing articles to analyzing data. But what does this mean for our future work prospects? Are we all destined to be replaced by robots? Let's dive into what Powell said and what others in the industry are observing.

Will AI Take Your Job: Fed Chair Jerome Powell's Cautious Warning

Powell's Cautious Warning: AI is Coming, But When and How?

During a recent testimony before the Senate Banking Committee, Fed Chair Jerome Powell acknowledged AI's potential to reshape the workforce. He noted that while the impact to date is “probably not great,” significant changes are on the horizon.

Here's a breakdown of Powell's key points:

  • Limited Current Impact: Powell stated that AI's effects on the job market haven't been substantial yet.
  • Potential for Job Displacement: He cautioned that in the initial stages, AI could “replace a lot of jobs, rather than just augmenting people's labor.” This means we might see some industries experience job losses before new AI-related positions emerge.
  • Uncertain Timeline and Consequences: Powell emphasized that the timing and magnitude of AI's impact remain uncertain. It's hard to predict exactly when we'll see these changes and what they'll look like.
  • Long-Term Optimism: Despite the potential for job displacement, Powell expressed optimism about AI's long-term potential to enhance productivity and create greater employment opportunities. He thinks, just like many people, that AI will create new opportunities down the road.

Powell's remarks were sparked by concerns raised by lawmakers about AI's potential to eliminate jobs. Senator Lisa Blunt Rochester cited Anthropic CEO Dario Amodei's prediction that AI could wipe out up to 50% of entry-level white-collar jobs within five years, potentially leading to a 10-20% increase in unemployment. That's a scary thought, but as Powell pointed out, it's still an “open question” how big AI's impact will be and how fast it will happen.

Beyond Powell: Industry Leaders Echo Concerns and Highlight Real-World Impacts

It's not just Powell sounding the alarm. Other industry leaders are seeing the effects of AI firsthand. Here's what some of them are saying:

  • Dario Amodei (Anthropic CEO): As mentioned earlier, Amodei believes AI could disrupt up to 20% of the broader labor force, significantly impacting entry-level roles.
  • Marc Benioff (Salesforce CEO): Benioff revealed that AI is already performing 30 to 50% of the work at Salesforce, leading to expectations of ongoing workforce reductions and productivity gains in areas like engineering, coding, and support.
  • BT (UK Telecommunications Company): BT plans to cut its workforce by 42% (approximately 55,000 jobs) by 2030, with AI potentially enabling even greater reductions. This shows companies are seriously considering AI as a means to cut costs and increase efficiency.

Real World Examples of AI Impact

Source Insight
Jerome Powell (Fed Chair) AI's current impact is limited but could cause significant job market changes.
Recent Study AI is not yet replacing jobs or depressing wages significantly.
BT (UK Telecom) Plans to cut 42% of workforce (55,000 jobs) by 2030, with AI enabling more cuts.
Anthropic CEO Dario Amodei AI could eliminate 50% of entry-level white-collar jobs in 5 years.
Salesforce CEO Marc Benioff AI handles 30-50% of Salesforce's work, leading to workforce reductions.

These examples highlight that we're not just talking about hypothetical scenarios. AI is already impacting the job market in tangible ways. Companies are using AI to automate tasks, reduce their workforce, and increase productivity.

What Can the Fed Do? The Limits of Monetary Policy

While the Federal Reserve plays a crucial role in the economy, Powell admitted that the Fed has limited tools to address the challenges posed by AI-driven labor market disruptions. He stated that the Fed's primary tool – interest rates – is not designed to tackle the complexities of technological change.

The Fed's main focus is on maintaining stable prices and maximum employment. But if AI causes widespread job displacement, it could be difficult for the Fed to achieve its employment goals. This underscores how AI brings in complex elements, such as unemployment.

This means that other solutions are needed. Powell suggests that broader policy interventions involving Congress, industry leaders, and labor experts are necessary to help workers adapt to AI and ensure a smooth transition.

So AI will take my job?

Well, I can't say it certainly won't. However, I think this situation needs to be viewed as an opportunity. Here's a balanced view.

The Pessimistic View

  • Job Loss: Automation through AI can lead to significant job losses, particularly in roles involving repetitive tasks. This could mean displacement for workers in sectors like manufacturing, data entry, and even customer service.
  • Skills Gap: The skills required in the future workforce will likely be heavily tech-focused, potentially leaving many workers with outdated skills behind. Those who aren't tech-savvy may find themselves at a disadvantage.
  • Wage Stagnation: Increased automation and a surplus of available workers could lead to lower wages, especially for those in lower-skilled positions. Companies could have more leverage to pay less as demand for labor decreases.

The Optimistic View

  • New Job Creation: AI is expected to create new types of jobs, particularly in fields like AI development, data science, and AI maintenance. The demand for professionals who can build, manage, and troubleshoot AI systems is likely to grow.
  • Increased Productivity: AI can assist workers, making them more productive and efficient. This could lead to economic growth and higher overall living standards.
  • Better Work Conditions: Automation can take over mundane and dangerous tasks, freeing up workers for more creative and fulfilling work. Workers can focus on strategy, innovation, and customer relations, improving job satisfaction.
  • Enhanced Innovation: AI can analyze vast amounts of data to uncover new insights and drive innovation across various industries. This could lead to breakthroughs in healthcare, transportation, and other fields, creating more opportunities.

Policy Considerations: Adapting to the AI Revolution

As AI continues to evolve, policymakers are starting to think about the right strategies to adapt.

  • Upskilling and Reskilling: Investing in upskilling and reskilling programs to help workers acquire the skills needed for AI-related jobs is critical. This could involve government-funded training programs, partnerships with educational institutions, and industry-led initiatives.
  • Four-Day Workweek: Some lawmakers are exploring the possibility of a four-day workweek to address potential job displacement and promote work-life balance.
  • Regulatory Frameworks: Developing regulatory frameworks to ensure that AI is used ethically and responsibly is also important. This could involve regulations around data privacy, algorithmic transparency, and bias detection.
  • Social Safety Net: Strengthening social safety nets, such as unemployment benefits and job placement services, can help workers transition between jobs and provide support during periods of unemployment.

My Take on the Situation

Well, I believe that AI is going to have a profound impact on the job market. While there are definitely reasons to be concerned about job displacement, I also see a lot of potential for AI to enhance our lives and create new opportunities.

I believe that AI will initially have a more disruptive effect in the short term, particularly for routine-based, automatable tasks. However, in the long run, once the technology becomes more widespread and roles have been redefined, AI has the potential to create new jobs by increasing overall organizational productivity and efficiency.

The key is to be proactive. We need to invest in education and training to ensure that workers have the skills they need to thrive in the AI-driven economy. We also need to create policies that support workers during this transition and ensure that the benefits of AI are shared broadly.

Ultimately, the future of work in the age of AI depends on how we choose to shape it. By working together, we can ensure that AI enhances rather than undermines the workforce.

Future-Proof Your Wealth—Even Amid AI Disruption

As AI transforms industries and raises job uncertainty, investing in real estate offers a stable path to income and security.

Norada connects you to turnkey rental properties that generate consistent cash flow—helping you build resilient wealth regardless of economic shifts.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Read More:

  • US Dollar Plummets to 3-Year Low: What It Means for Your Wallet
  • US-Iran War: A New Threat to America's Shaky Economy
  • Bond Market Today and Outlook for 2025 by Morgan Stanley
  • The Risk of New Tariffs: Will They Crash the Stock Market and Economy?
  • Stagflation Alert: Economist Survey Predicts Weak Q1 GDP Due to Tariffs
  • Goldman Sachs Significantly Raises Recession Probability by 35%
  • 2008 Crash Forecaster Warns of DOGE Triggering Economic Downturn
  • Stock Market Crash Prediction With Huge Discounts on Bitcoin, Gold, Houses
  • Stock Market Predictions for the Next 5 Years
  • Is the Bull Market Over? What History Says About the Stock Market Crash
  • Wall Street Bear Predicts a Historic Stock Market Crash Like 1929

Filed Under: Economy Tagged With: Artificial Intelligence, Economic Crisis, Economy, Jobs

Fed Projects Two Interest Rate Cuts Later in 2025

June 29, 2025 by Marco Santarelli

Fed Projects Two Interest Rate Cuts Later in 2025

Today's news from the Federal Reserve (also known as the Fed) might sound a little complicated, but let's break it down. On June 18, 2025, the Fed did not cut interest rates. They left them where they were, in the range of 4.25% to 4.5%. However, the central bank's updated forecast, or their projections, is the real headline-grabber. They're expecting to cut rates twice by the end of 2025. This means that while things seem status quo right now, the Fed is hinting strongly that relief for consumers and businesses is on the horizon.

As someone who's been following economic trends for quite some time now, I can tell you that this is a delicate balancing act. The Fed wants to keep inflation under control while also encouraging economic growth. This is always a tightrope walk, and these projections show they're trying to find the right balance.

Fed Projects Two Interest Rate Cuts Later in 2025

A Steady Hand Today, A Cautious Hope for Tomorrow

The decision to hold rates steady wasn't exactly a surprise. It's the fourth meeting in a row they've kept things the same, following a series of cuts in late 2024 that knocked rates down by 1%. The Fed is all about following the data, and this time, it's telling them to hold steady. The big news, though, is what they think will happen later. They're estimating the benchmark rate could drop to about 3.75%–4% by the end of 2025, which pencils out to two quarter-point cuts.

Now, it's not like everyone on the Fed board is singing the same tune. Here's a quick look at how the Fed's policymakers are leaning:

  • 7 officials: Think there won't be any cuts in 2025.
  • 2 officials: Expect only one cut.
  • 8 officials: Are looking for two cuts.
  • 2 officials: Envision three cuts.

As you can see, there's some disagreement. This shows the complexity of the situation and how the Fed is trying to gauge the future. The majority are playing it safe, signaling they'll ease up gradually in 2025.

What's Driving These Projections? The Economic Outlook

The Fed's forecasts give us some clues as to why they're leaning towards rate cuts. Here’s a brief rundown:

  • Core PCE Inflation: The Fed thinks this will hit 3.1% by the end of 2025 (up from 2.8% in March) before cooling to 2.4% in 2026. This means inflation is still a worry.
  • GDP Growth: They're forecasting 1.4% growth for 2025, slightly lower than their previous prediction of 1.7%. The economy might be slowing down a bit.
  • Unemployment Rate: The Fed projects that it will rise to 4.5% by the end of 2025, from the current 4.2%. This suggests that the labor market might cool off.

These numbers paint a picture. The Fed sees inflation sticking around for a while, which means holding rates steady now. However, with slower growth and a slight uptick in unemployment, they think they can afford to lower rates later without letting inflation get out of control.

Why the Wait? Unpacking the Fed's Reasoning

Why the delay in cutting rates? Several factors are influencing the Fed's patience:

  1. Persistent Inflation: There are ongoing price pressures. Tariffs, especially from measures such as the ones implemented by President Trump on goods from China, drive up the cost of things like electronics. Although the Fed expects this to peak over the summer, additional pressure is possible as a tariff pause expires.
  2. Geopolitical Tensions: The ongoing tensions in the Middle East, and the war between Russia and Ukraine, continue to impact commodities markets, especially oil. They push up prices and complicate the situation regarding inflation regulation.
  3. Balanced Labor Market: According to Fed Chair Jerome Powell, the labor market generally is stable. It isn’t particularly adding to inflation at the moment, which reduces the urgent need to lower rates.

Essentially, the Fed is trying to be proactive. By projecting cuts for later in 2025, they acknowledge that the underlying inflationary pressures are likely to ease, allowing them to shift to a more accommodating stance without triggering a fresh wave of inflation.

When Might the Cuts Actually Happen?

The Fed didn't give specific dates, but markets are offering some predictions. Experts believe a cut is unlikely at the late-July meeting, with a better chance at the September meeting, around September 17. A second cut could arrive in November or December.

The fact that the Fed is being so cautious is crucial. They’re showing they want to be sure before making any major moves.

Two Cuts: What It Means for You

The expectation of two interest rate cuts is a big deal for people like you and me. Here's what it could mean:

  • Borrowers: High borrowing costs mean more pain for now. Credit cards might still have APRs around 20%, new car loans about 7.3%, and 30-year mortgages around 6.91%. If cuts happen, these figures may drop by 0.5% or more.
  • Savers: High-yield savings accounts are still looking good. If you’re getting over 4% on your savings, it’ll stay attractive for a while.
  • Businesses: If businesses are dealing with high loan costs and uncertainty over tariffs, they might hold off on investing. Lower rates could be just what they need.

In other words, if you are currently struggling with costs, two anticipated cuts mean you can be hopeful.

Market Reactions and Broader Context

The markets' reaction to the Fed's combined message of “no cut now, two later” was more or less neutral. Stocks saw some interesting changes: the S&P 500 increased, while the Dow dipped slightly, and so did the Nasdaq.

The broader context includes factors like the potential impact of the tariff policies and political pressures on the Fed. The Middle East situation is also an important factor that can potentially upset energy markets.

Looking Ahead

The Federal Reserve's projections give us a cautious sense of hope after today's decision. The focus remains on keeping inflation under control while keeping an eye on risks. As the Fed navigates these challenges, keep in mind that any real shift will probably occur later in 2025.

So, what's my take? As someone in the business of keeping tabs on the market, I think the Fed is doing what it needs to do. They're signaling that they're aware of the challenges facing both consumers and businesses. It’s a balancing act, but the potential for two rate cuts later this year shows they're thinking long-term. It’s a matter of being patient until we see the economy improving.

Position Your Portfolio Ahead of the Fed’s Next Move

The Federal Reserve’s next rate decision could shape real estate returns through the rest of 2025. Whether or not a rate cut happens tomorrow, smart investors are acting now.

Norada Real Estate helps you secure cash-flowing properties in stable markets—shielding your investments from volatility and interest rate swings.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Recommended Read:

  • Federal Reserve Holds Interest Rates Steady on June 18, 2025
  • What are the Odds of a Fed Rate Cut Today, June 18, 2025?
  • Interest Rate Predictions for the Next 3 Years: 2025, 2026, 2027
  • When is Fed's Next Meeting on Interest Rate Decision in 2025?
  • Interest Rate Predictions for the Next 10 Years: 2025-2035
  • Will the Bond Market Panic Keep Interest Rates High in 2025?
  • Interest Rate Predictions for 2025 by JP Morgan Strategists
  • Interest Rate Predictions for Next 2 Years: Expert Forecast
  • Fed Holds Interest Rates But Lowers Economic Forecast for 2025
  • Fed Indicates No Rush to Cut Interest Rates as Policy Shifts Loom in 2025
  • Fed Funds Rate Forecast 2025-2026: What to Expect?
  • Interest Rate Predictions for 2025 and 2026 by NAR Chief
  • Market Reactions: How Investors Should Prepare for Interest Rate Cut
  • Impact of Interest Rate Cut on Mortgages, Car Loans, and Your Wallet

Filed Under: Economy, Financing Tagged With: Economy, Fed, Fed Rate Cut, Federal Reserve, inflation, Interest Rate

US Dollar Plummets to 3-Year Low: What It Means for Your Wallet

June 28, 2025 by Marco Santarelli

US Dollar Plummets to 3-Year Low: What It Means for Your Wallet

The US Dollar, long a cornerstone of global financial stability, has recently fallen to its lowest level in three years, sparking widespread concern and discussion. As of June 27, 2025, the US Dollar Index (DXY) has dropped to around 97, a level not seen since March 2022, representing a decline of over 10% this year alone.

This significant event has captured the attention of investors, policymakers, and consumers, raising questions about its causes and consequences. Let's explore the reasons behind the dollar’s decline, its implications for Americans and the global economy, and what the future might hold for the world’s reserve currency.

US Dollar Plummets to Three-Year Low: Causes of the Decline

The US Dollar’s fall is driven by a combination of economic, political, and market factors:

Economic Uncertainty and Tariffs

President Donald Trump’s economic policies, including the “Liberation Day” tariffs and the proposed “Big, Beautiful Bill,” have introduced significant uncertainty. These measures, aimed at protecting US industries, have raised fears of trade wars and economic slowdowns. An X post from @nexta_tv noted, “Due to U.S. tariffs, investors are losing trust in the currency as a ‘safe haven’ and are effectively pulling out” X Post. The “Big, Beautiful Bill” could add over $2.5 trillion to the federal debt, further eroding investor confidence (TIME).

Federal Reserve Independence Concerns

Speculation about changes in Federal Reserve leadership has significantly impacted the dollar. Reports indicate that President Trump is considering announcing a new Federal Reserve Chair before Jerome Powell’s term ends in May 2026. The prospect of a dovish chair who might cut interest rates has led to a decline in US bond yields, weakening the dollar. Kathleen Brooks, research director at XTB, stated, “This could undermine Powell’s final months as chair. The consensus is that Trump will pick a dovish chair, who is likely to cut interest rates. This triggered a decline in U.S. bond yields, which has weighed on the dollar” (MarketWatch).

Global Economic Shifts

The perception of the US as a safe haven for investments is waning. Investors are diversifying away from US assets, reflecting a broader shift in global economic power. Bilge Erten, an economist at Northeastern University, observed, “The US is no longer seen as a safe haven for investments. The dollar’s decline reflects a broader shift in global economic power” (TIME). This shift is evident in the dollar’s performance against other currencies, with the euro reaching its strongest level since September 2021 and the dollar hitting a decade-and-a-half low against the Swiss franc (Reuters).

Market Dynamics

The dollar has weakened against major currencies, including the euro, Swiss franc, and Japanese yen. The US Dollar Index fell to 97, with the euro up 0.33% at $1.1697 and the British pound trading above $1.3750 for the first time since 2021. An X post from @Investingcom reported, “U.S. DOLLAR INDEX FALLS TO THREE-YEAR LOW OF 97.68” X Post.

Currency Pair Performance Details
USD/EUR Down 0.33% Euro at $1.1697, strongest since September 2021
USD/CHF Decade-and-a-half low Swiss franc at 0.80030
USD/JPY Down 0.57% Japanese yen at 144.415
USD/GBP Weakened British pound above $1.3750, first time since 2021

Implications of the Dollar’s Fall

The dollar’s decline has significant consequences for both the US and the global economy:

For Americans

A weaker dollar increases the cost of imported goods and international travel, potentially raising the cost of living. TIME reported, “Americans’ wallets could be set to take a hit as the U.S. dollar has tumbled to a three-year low amid concerns about the stability and strength of the US economy.” However, it also makes US exports more competitive, benefiting domestic businesses. For example, industries like manufacturing and agriculture could see increased demand for their products abroad.

For the Global Economy

A weaker dollar can lead to higher inflation in countries reliant on US imports, as goods become more expensive. It also affects the value of dollar-denominated assets held by foreign investors, potentially prompting capital flight from the US. Additionally, the cost of servicing US debt held by foreign entities rises, complicating fiscal management.

For Financial Markets

The dollar’s decline has contributed to record highs in stock markets, as a weaker currency boosts corporate earnings when repatriated. However, it also introduces volatility, particularly for investors holding dollar-denominated assets. Michael Metcalfe from State Street noted, “The dollar is in a structural decline. Investors are the most negative on the dollar since the COVID pandemic.”

Expert Opinions and Market Reactions

The financial community has been vocal about the dollar’s decline:

  • Bilge Erten, Northeastern University: “The US is no longer seen as a safe haven for investments. The dollar’s decline reflects a broader shift in global economic power” (TIME).
  • Michael Metcalfe, State Street: “The dollar is in a structural decline. Investors are the most negative on the dollar since the COVID pandemic” (Reuters).
  • Kathleen Brooks, XTB: “The talk of an early Fed Chair nomination has undermined Powell’s final months as chair. The market expects a dovish replacement, which has triggered a decline in US bond yields and weighed on the dollar” (MarketWatch).

On X, the topic is trending, with users expressing concern and analyzing implications. For instance, @Han_Akamatsu posted, “The dollar is taking a serious hit right now… The Fed is cornered right now. Can’t hike, can’t cut. The world is rejecting the U.S. debt, and the dollar is…” X Post. Another post from @MarioNawfal stated, “U.S. DOLLAR HITS 3-YEAR LOW AS TRUMP RATTLES THE FED — AND MARKETS PANIC” X Post.

Historical Context

The US Dollar has experienced fluctuations in the past. It spiked in value around 2015, deteriorated during the COVID-19 pandemic, and rose again in subsequent years. Historically, the dollar was notably high in 2002 and 1985 before experiencing sharp declines. The current drop, if sustained, could mark the largest first-half-year decline since the early 1970s, when currencies began free-floating.

Future Outlook

The future of the US Dollar is uncertain and depends on several factors:

  • Federal Reserve Decisions: The outcome of the Fed Chair nomination and subsequent monetary policy will be critical. A dovish chair could lead to further rate cuts, potentially weakening the dollar further.
  • US Economic Policies: The impact of tariffs and fiscal policies, such as the “Big, Beautiful Bill,” will influence investor confidence and economic stability.
  • Global Economic Trends: Continued diversification away from US assets could sustain downward pressure on the dollar.

The coming months will provide more clarity, but for now, the dollar’s decline highlights the interconnectedness of global economies and the fragility of financial stability.

Bottom Line:

The US Dollar’s fall to a three-year low is a complex issue driven by economic policies, Federal Reserve uncertainties, and global economic shifts. While it poses challenges for Americans through higher costs, it also offers opportunities for exporters. Globally, the decline could reshape investment patterns and economic relationships. As policymakers, businesses, and investors navigate this evolving landscape, the dollar’s trajectory will remain a critical focus for the global economy.

Protect Your Wealth as the Dollar Weakens

With the U.S. Dollar hitting a three‑year low, savvy investors are turning to tangible assets that hold value.

Norada offers turnkey rental properties in resilient U.S. markets—providing passive income and serving as a hedge against currency depreciation.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Read More:

  • US-Iran War: A New Threat to America's Shaky Economy
  • Bond Market Today and Outlook for 2025 by Morgan Stanley
  • The Risk of New Tariffs: Will They Crash the Stock Market and Economy?
  • Stagflation Alert: Economist Survey Predicts Weak Q1 GDP Due to Tariffs
  • Goldman Sachs Significantly Raises Recession Probability by 35%
  • 2008 Crash Forecaster Warns of DOGE Triggering Economic Downturn
  • Stock Market Predictions 2025: Will the Bull Run Continue?
  • Stock Market Crash: Nasdaq 100 Tanks 3.5% Amid AI Concerns
  • Stock Market Crash Prediction With Huge Discounts on Bitcoin, Gold, Houses
  • S&P 500 Forecast for the Next Year: What to Expect in 2025?
  • Stock Market Predictions for the Next 5 Years
  • Echoes of 1987: Is Today’s Stock Market Crash Leading to a Recession?
  • Is the Bull Market Over? What History Says About the Stock Market Crash
  • Wall Street Bear Predicts a Historic Stock Market Crash Like 1929
  • Economist Predicts Stock Market Crash Worse Than 2008 Crisis
  • Next Stock Market Crash Prediction: Is a Crash Coming Soon?
  • Stock Market Crash: 30% Correction Predicted by Top Forecaster

Filed Under: Economy Tagged With: Economic Crisis, Economy, Financial Crisis, GDP, Recession, Trade

US-Iran War: A New Threat to America’s Shaky Economy

June 23, 2025 by Marco Santarelli

US-Iran War: A New Threat to America's Shaky Economy

Is the US heading for an economic catastrophe because of a war with Iran? Sadly, the answer is a resounding yes. Direct US military intervention in Iran, particularly the June 2025 strikes on Iranian nuclear facilities, throws a massive wrench into an already sputtering US economy. With a contracting GDP, ongoing trade wars, and a looming recession, this conflict could be the tipping point that sends America's economy into a full-blown crisis.

US-Iran War: A New Threat to America's Shaky Economy

A Powder Keg: The Current State of US-Iran Relations

For decades, the relationship between the US and Iran has been a roller coaster of tension and hostility. It all kind of stems from the Iranian Revolution in 1979, and from then onwards, there have been arguments over Iran's nuclear ambitions that only made thing worse.

In June 2025, things went nuclear when Israel launched a unilateral attack. They targeted Iran's nuclear facilities, missile factories, and even senior military officials on June 13th.

Iran retaliated with drone and missile attacks, which basically forced the US to step in with its own strikes on Iran's nuclear program. The temperature’s rising fast. Iran's foreign minister is calling this “an act of war,” and let me tell you, everyone's afraid of a bigger regional conflict.

The Trump administration, which supports Israel's goal with threats of further military action if Iran doesn't back down on that nuclear plan, has now shifted from diplomacy to military aggression. I find it a real shame that years of built-up negotiations came down to strikes.

The situation is extremely tense, especially because Iran's parliament is considering shutting down the Strait of Hormuz, a super-important oil shipping route. If that happens, it could send shock waves all over the world's economy.

An Economy on Shaky Ground

Let's be honest, the US economy was already in a fragile state even before any bombs started dropping. Several factors were already in play:

  • GDP Contraction: The US economy shrank a bit in the first quarter of 2025. It might not seem like much (0.3%), but this was the first decline since 2022. A lot of it happened because people were rushing to buy more imports to avoid the higher tariffs.
  • Trade Tensions: The Trump administration's actions, including the implementation of significant tariffs on April 2, 2025, which was nicknamed “Liberation Day,” hurt the economy, created a big stock market crash, and brought economic uncertainty. As an American, I wonder how we can maintain economic stability with these kinds of radical policies happening.
  • Recession Risks: Major financial institutions like J.P. Morgan are saying there's a higher chance of a recession happening. The Federal Reserve itself is saying that there's as much of a chance of a full-blown economic crisis as there is of slow growth. Pretty grim, right?
  • Market Volatility: The S&P 500 has been all over the place, but it did manage to turn positive in May 2025. Still, this inconsistency makes the economy more unpredictable.
  • Consumer and Business Confidence: People and businesses aren't feeling too confident. With trade wars and increased tariffs, they’re holding back on spending and investing.

A Recipe for Disaster: The Economic Impact of War

Wars have a long history of causing economic pain, especially if the economy is already in trouble. The US-Iran war is likely to hit the US economy in several ways:

  • Oil Price Spikes: Iran is a big oil producer, and the Strait of Hormuz is critical for transporting oil. Disruptions to either of these could cause huge price increases. Brent crude prices are already climbing.
    • Higher oil prices mean higher costs for transportation, manufacturing, and just about everything else. This could lead to higher inflation and reduce people's spending power. Now, that sounds horrible!
  • Increased Military Spending: War costs money, A LOT of money. Sending troops, buying equipment, and providing support all add up. This will put a strain on the federal budget, which is already dealing with rising debt.
    • More borrowing means higher interest rates, which reduces investment and slows down economic growth, which is another problem.
  • Market Uncertainty: Wars always make financial markets nervous. The US-Iran conflict has already caused the stock market to bounce around. Investors are running to safer investments like gold and the US dollar, which tells you they're not feeling good about the economy.
  • Global Trade Disruptions: If the conflict affects shipping routes in the Middle East or leads to more sanctions, it could hurt global trade. This would increase the cost of goods and services, further damaging the US economy.
  • Fiscal and Monetary Policy Challenges: The Federal Reserve is in a tough spot. Higher oil prices could cause inflation, and increased government borrowing could limit the government's financial options. This could lead to tighter monetary policies, which could further slow down the economy.

Specific Risks: The US-Iran War's Potential to Worsen the Crisis

The US-Iran war poses specific risks that could exacerbate the economic crisis:

  • Exacerbating Recession Risks: With the GDP contraction and trade tensions, the US is already close to a recession. The war could be what pushes it over the edge by increasing costs and reducing economic activity.
  • Inflation Pressures: Rising oil prices can lead to higher inflation, damaging consumer buying power and increase business costs.
  • Currency Fluctuations: Initially, the US dollar could grow stronger, but after conflict it could lead to devaluation.
  • Reduced Confidence: The war could hurt business and customer confidence, leading to reduced spending and investment, mixing up the issues of trade tensions.

Expert Opinions: A Cause for Concern

Those who work with financials everyday are showing substantial concern about the US-Iran conflict. Al Jazeera has warned that the global economy could face shock because of the tension of trade disturbances. CNN Business reported that Federal Reserve Chair Jerome Powell is keeping an eye on the situation. Bloomberg highlighted that the US strikes come at a “fragile time for the global economy.”

The Bottom Line: A Looming Economic Threat

The US-Iran war is a serious threat to the US economy. With trade tensions, a shrinking GDP, and the risk of recession already looming, this conflict could be the breaking point. The potential for higher oil prices, increased military spending, market volatility, and trade disruptions could make the economic crisis even worse, potentially pushing the US into recession or, worse, a financial crisis. I think policymakers need to proceed with caution to reduce risk and prevent further economic issues. One thing I'm sure of is that the future is uncertain.

Secure Your Investments Amid Geopolitical Risk

With rising tensions from a potential US‑Iran conflict, economic volatility is on the horizon. Real estate offers a tangible hedge.

Norada provides access to professionally managed, cash‑flowing rental properties in resilient U.S. markets—designed to withstand global shocks.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Read More:

  • Bond Market Today and Outlook for 2025 by Morgan Stanley
  • The Risk of New Tariffs: Will They Crash the Stock Market and Economy?
  • Stagflation Alert: Economist Survey Predicts Weak Q1 GDP Due to Tariffs
  • Goldman Sachs Significantly Raises Recession Probability by 35%
  • 2008 Crash Forecaster Warns of DOGE Triggering Economic Downturn
  • Stock Market Predictions 2025: Will the Bull Run Continue?
  • Stock Market Crash: Nasdaq 100 Tanks 3.5% Amid AI Concerns
  • Stock Market Crash Prediction With Huge Discounts on Bitcoin, Gold, Houses
  • S&P 500 Forecast for the Next Year: What to Expect in 2025?
  • Stock Market Predictions for the Next 5 Years
  • Echoes of 1987: Is Today’s Stock Market Crash Leading to a Recession?
  • Is the Bull Market Over? What History Says About the Stock Market Crash
  • Wall Street Bear Predicts a Historic Stock Market Crash Like 1929
  • Economist Predicts Stock Market Crash Worse Than 2008 Crisis
  • Next Stock Market Crash Prediction: Is a Crash Coming Soon?
  • Stock Market Crash: 30% Correction Predicted by Top Forecaster

Filed Under: Economy Tagged With: Economic Crisis, Economy, Financial Crisis, GDP, Recession, Trade

Is the Looming US Debt Bubble a Ticking Time Bomb?

June 20, 2025 by Marco Santarelli

Is the Looming US Debt Bubble a Ticking Time Bomb?

Is the US debt bubble a ticking time bomb? Yes, at $36.56 trillion and a debt-to-GDP ratio of 122%, the US national debt presents a significant long-term economic challenge if left unaddressed. While the immediate risk of a fiscal crisis might seem low now, the current path is raising serious concerns among economists and policymakers alike. Let's dive into what's driving this debt, the potential dangers, and what, if anything, can be done about it.

Is the Looming US Debt Bubble a Ticking Time Bomb?

How Did We Get Here? A Look at the Roots of the Debt

The US hasn’t always been swimming in debt. In fact, at the turn of the millennium, things were looking pretty good. But since 2001, the national debt has exploded from $5.8 trillion to over $36 trillion. What happened? It's a combination of factors, and it's important to understand each one:

  • Tax Cuts: Think about things like the 2017 Tax Cuts and Jobs Act. While proponents argued they would stimulate growth, they also reduced federal revenue, adding to the deficit.
  • Increased Spending: An aging population means rising costs for programs like Social Security and Medicare. People are living longer, requiring more support. This is a huge pressure on the budget.
  • Economic Crises: Let's not forget the big ones – the 2008 financial crisis and the COVID-19 pandemic. These events triggered massive government spending to keep the economy afloat. Necessary at the time, but they added trillions to the debt.

These factors have created an average annual deficit of almost $1 trillion since 2001. That's a lot of money borrowed year after year, and it adds up quickly!

The Current State: Where Are We Today?

As of March 2025, the numbers are staggering:

  • Total federal debt: $36.56 trillion.
  • Debt held by the public: $26.5 trillion.
  • Intragovernmental debt (like Social Security trust funds): $12.1 trillion.
  • Debt-to-GDP ratio: 122%.

That debt-to-GDP ratio is particularly worrying. It means the nation's debt is larger than its entire yearly output of goods and services. It's like having a mortgage that's bigger than the value of your house – not a comfortable position to be in.

And then there's the cost of just servicing the debt – paying the interest on it. In July 2023, that was up to $726 billion annually, which makes up about 14% of total federal spending. I mean seriously, is it even plausible? Interest rates are probably going to go up, further tightening the federal budget.

Projections and Risks: What Does the Future Hold?

This is where things get a bit scary. The Penn Wharton Budget Model projects the debt that is held by the public might reach unsustainable levels somewhere between 2040 and 2045. At that point, the debt-to-GDP ratio could be a 175-200%. The model says that financial markets will probably reach its limit with only 20 years of accumulated deficits before any corrective action is taken. Rising interest rates are making analysts even more worried, with some predicting a crisis could come even sooner.

Year CBO PWBM Baseline +50 b.p. +100 b.p. +150 b.p. +200 b.p. +250 b.p.
2023 98 97 98 98 98 99 99
2025 102 100 101 102 104 105 107
2030 108 107 111 115 119 123 128
2035 120 125 131 139 146 154 162
2040 134 144 154 165 177 190 204
2045 150 163 177 192 210 228 249
2050 169 188 207 229 253 280 310

Source: Penn Wharton Budget Model, based on CBO’s Long-Term Budget Outlook (June 2023).

Brookings has some concerns like political gridlock over debt limitations, China backing off from some debt policies, leading to possible strategic failure. A large increase of interest rates, decrease in the U.S. dollar, equities markets and world financial crisis are a few potential crisis. This could also erode asset values and destabilized economies.

What the Experts Are Saying: A Chorus of Concern

It's not just analysts crunching numbers; prominent economists are sounding the alarm. Here's a taste of what they're saying:

  • Ray Dalio: He's warning about a “debt-induced economic heart attack” triggered by rising interest payments and the Federal Reserve printing more money, which could fuel inflation and weaken the dollar. He says we need to cut the budget deficit to 3% of GDP to help lower interest rates.
  • Ken Rogoff: He predicts a debt crisis could hit within 4-5 years if current policies continue. In his view, debt isn't a “free lunch,” and we could face a major inflation spike or an economic shock even worse than what we saw during the COVID-19 pandemic.
  • Niall Ferguson: He points to “Ferguson’s Law,” which states that when a nation’s debt interest surpasses its defense spending—which happened in 2024—it risks losing its superpower status. Think about that!

It's important to note that not everyone agrees a crisis is imminent. Some reasonable views suggest a crisis is unlikely as long as we don't engage in irresponsible actions such as threatening default or hurting the Federal Reserve's credibility.

The Political Football: Debt Ceiling Debates and Policy Responses

The debt ceiling has become a recurring political battle. Remember the January 2023 showdown when the US hit its $31.4 trillion debt ceiling? It led to a June 2023 deal to suspend it until January 2025, which is just around the corner. That agreement is supposed to reduce debt by $1.5 trillion over the next decade, but it doesn't address the underlying structural deficit problems.

On the other hand, there are proposals to extend tax cuts, which could add trillions to the deficit.

What's At Stake: Economic Implications

Even if we avoid a full-blown crisis, the rising debt has significant economic consequences:

  • Crowding Out: High interest payments soak up government funds that could be used for important investments in infrastructure, education, and healthcare.
  • Higher Interest Rates: As the government borrows more, it can drive up interest rates for everyone, making it more expensive for consumers and businesses to borrow money and invest. This can slow down economic growth.
  • Burdening Future Generations: By kicking the can down the road, we're essentially making future generations pay the price, either through higher taxes or reduced government services.

And in a real crisis, the consequences could be even more severe. Imagine a sharp spike in interest rates, a plummeting dollar, and a global financial crisis, seriously impacting asset values and harming our economy.

So, What Can Be Done? Navigating a Path Forward

There's no easy fix, and any solution will likely involve some difficult choices. Here are a few things that could be on the table:

  • Spending Cuts: This is always a tough sell, as it means reducing funding for government programs. But identifying areas where spending can be reduced or made more efficient is a necessary part of the conversation.
  • Tax Increases: Raising taxes is never popular, but it's another potential lever to increase government revenue. This could involve raising income taxes, corporate taxes, or other forms of taxation.
  • Entitlement Reform: This refers to making changes to programs like Social Security and Medicare to ensure their long-term sustainability. This could involve raising the retirement age, reducing benefits, or increasing contributions.
  • Stimulating Economic Growth: A stronger economy generates more tax revenue, which can help to reduce the deficit. Policies that promote innovation, investment, and job creation can all contribute to this.

The biggest challenge is getting both parties to compromise and work together to come up with a solution. Political gridlock has been a major obstacle in the past and will continue to be a major hurdle.

My Take: A Call for Responsible Leadership

As an individual, I am concerned about the long-term impact of the US debt. I don't think the US is in a position to keep increasing the debt pile at the rate that the current policies dictate. I worry about the future of our economy and what economic instability and large debts will mean for coming generations.

I believe that is essential for elected leaders to put aside their partisan differences and govern responsibly. I encourage you to make your voice heard.

Bottom Line: 

The Looming US Debt Bubble is a significant threat to economic stability but also an opportunity for change. We must ask for elected leaders to put aside their differences to come to compromises that prioritize fiscal responsibility and the well-being of the country. By supporting policies that promote fiscal sustainability, we, as citizens, can help secure a more prosperous future for ourselves and generations to come.

Work With Norada – Build Wealth

With economists warning of stagflation and weak GDP due to tariffs, now is the time to invest in stable, income-generating real estate for financial security.

Norada’s turnkey rental properties provide consistent cash flow and long-term wealth, no matter the economic climate.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

Read More:

  • Bond Market Today and Outlook for 2025 by Morgan Stanley
  • The Risk of New Tariffs: Will They Crash the Stock Market and Economy?
  • Stagflation Alert: Economist Survey Predicts Weak Q1 GDP Due to Tariffs
  • Goldman Sachs Significantly Raises Recession Probability by 35%
  • 2008 Crash Forecaster Warns of DOGE Triggering Economic Downturn
  • Stock Market Predictions 2025: Will the Bull Run Continue?
  • Stock Market Crash: Nasdaq 100 Tanks 3.5% Amid AI Concerns
  • Stock Market Crash Prediction With Huge Discounts on Bitcoin, Gold, Houses
  • S&P 500 Forecast for the Next Year: What to Expect in 2025?
  • Stock Market Predictions for the Next 5 Years
  • Echoes of 1987: Is Today’s Stock Market Crash Leading to a Recession?
  • Is the Bull Market Over? What History Says About the Stock Market Crash
  • Wall Street Bear Predicts a Historic Stock Market Crash Like 1929
  • Economist Predicts Stock Market Crash Worse Than 2008 Crisis
  • Next Stock Market Crash Prediction: Is a Crash Coming Soon?
  • Stock Market Crash: 30% Correction Predicted by Top Forecaster

Filed Under: Economy Tagged With: Debt Bubble, Economic Forecast, Economy, inflation

  • 1
  • 2
  • 3
  • …
  • 17
  • Next Page »

Real Estate

  • Birmingham
  • Cape Coral
  • Charlotte
  • Chicago

Quick Links

  • Markets
  • Membership
  • Notes
  • Contact Us

Blog Posts

  • Mortgage Rates Today: The States Offering Lowest Rates – July 15, 2025
    July 15, 2025Marco Santarelli
  • Worst Florida Housing Markets Facing Steepest Price Declines in 2025
    July 15, 2025Marco Santarelli
  • Mortgage Rates Today July 15, 2025: 30-Year and 15-Year Fixed Rates See Minor Drop
    July 15, 2025Marco Santarelli

Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
BBB
  • Terms of Use
  • |
  • Privacy Policy
  • |
  • Testimonials
  • |
  • Suggestions?
  • |
  • Home

Copyright 2018 Norada Real Estate Investments

Loading...