BlackRock 2025 Outlook: AI boom continues to boost US stocks, Fed expected to be unable to lower interest rates below 4%

BlackRock, the world's largest asset management company, expects the AI boom to continue to boost the US stock market and support broader economic growth next year, despite the rising US debt levels that could threaten its optimistic forecast for 2025. The institution stated that AI technology innovation may benefit US stocks more than European stocks. The institution also stated that although US economic growth may cool slightly next year, the Federal Reserve is unlikely to significantly cut interest rates because inflation remains sticky and higher than the central bank's target. The institution expects rates to not fall below the current 4.5%-4.75% to below 4%. Continued price pressure from geopolitical divisions and infrastructure spending may put pressure on the bond market.