BlackRock 2025 outlook: artificial intelligence boom continues to boost U.S. stocks, Fed is not expected to cut interest rates below 4%

BlackRock, the world's largest asset manager, expects an artificial intelligence boom next year to continue boosting U.S. stocks and supporting broader economic growth, although rising U.S. debt levels could threaten its bullish forecast for 2025. Innovations in artificial intelligence technology could benefit U.S. stocks more than European stocks, the agency said. While U.S. economic growth could cool slightly next year, the Federal Reserve is likely to be unable to cut interest rates significantly because inflation remains sticky and above the central bank's target, the agency said. The agency does not expect interest rates to fall below 4 percent from the current 4.5 percent to 4.75 percent. Continued price pressure from factors such as geopolitical fragmentation and infrastructure spending could weigh on the bond market.