FLARblog | U.S. Economic Outlook in 2025 Q1 and Latin America’s External Financing Conditions

In the first quarter of 2025, economic conditions in the United States reflect a labor market showing mixed signals, alongside persistent inflationary pressures. This context may limit the Federal Reserve’s (Fed) room to cut its policy rate, suggesting a scenario of higher international interest rates for a prolonged period. For Latin America, this outlook poses an additional challenge by keeping the cost of external financing elevated, particularly for economies with high levels of exposure to external debt.