Fed forecast could spell cloudy skies for biotech into 2025

The XBI fell nearly 5% on Wednesday after the Fed signaled it now expects fewer interest rate cuts in 2025, which likely means that biotech stays under a macroeconomic cloud for longer next year.

Biotech indexes led the broader market down on Wednesday afternoon following publication of the Federal Reserve’s expectations after its December Federal Open Market Committee meeting. Despite the agency reducing the Federal interest rate by 25 basis points to 4.25-4.5%, the agency’s median economic projections now estimate 0.5% in total interest rate cuts in 2025, down from the 1% in cuts forecast in September. ...