The Federal Reserve has raised its target for the federal funds rate by half a percentage point by the end of 2025. Andrew Hollenhorst, an economist at Citi, believes the Fed may be in a position of being overwhelmed. With the core PCE up 0.1% month-on-month in November and price inflation slowing, the Fed may eventually cut rates by more than currently expected. "In our base case, a weaker labour market would cause the Fed to cut rates at every subsequent meeting." This view is at odds with market expectations that the Fed will pause rate cuts in January. "But even if we are wrong, sideways unemployment and slowing inflation are enough reasons to cut rates at least at every meeting other than January."