The Wisconsin Department of Revenue’s (DOR’s) latest economic forecast expects federal interest rates to remain elevated, with only one rate cut scheduled for 2025.
Uncertainty is an inherent aspect of economic forecasting. The current economic and geopolitical landscape introduces an additional layer of complexity, further amplifying the unpredictability of any projection.
The Wisconsin forecast is based on a national S&P Global forecast released in early February.
The U.S. economy ended 2024 with strong GDP growth but showed early signs of a cooling labor market and slowing consumption.
While the labor market is cooling, inflation is once again emerging as a concern for this year. The Federal Reserve is now expected to cut interest rates only once in 2025, rather than twice as previously reported, in response to the persistent inflation.
The forecast projects Wisconsin’s unemployment rate to peak at 3.5% by the end of 2027, compared to 4.5% nationally.
The forecast anticipates moderate deceleration in 2025, with personal income and wage growth slightly above 4%. See the full report.