By Divya Chowdhury and Bansari Mayur Kamdar

DAVOS, Switzerland (Reuters) – The chief investment officer at Guggenheim Partners forecast on Monday that the U.S. Federal Reserve is likely to cut interest rates roughly every quarter through 2025, bringing the cut to about 75 basis points basis or even a full percentage point this year.

The Fed will continue to cut, albeit on a slower-than-expected path, Anne Walsh, chief information officer at Guggenheim, told the Reuters Global Markets Forum at the start of the World Economic Forum’s annual meeting in Davos .

Traders’ bets have moved in recent days on just one Fed rate cut this year with the possibility of a second cut on the balance sheet, down from at least three a month ago.

Tariffs expected to be imposed by incoming President Donald Trump likely won’t be as stinging as most expect, Walsh said, as long as the dollar remains strong as the reserve currency and the U.S. continues to attract capital.

Walsh expects tariffs, on average, to rise by less than 10% overall and be more country-specific.

After a strong rally through 2022, the bond market is now trading in a range for its third year, Walsh said, with the volatility of that fact making it interesting.

“If we get to 5% 10-year, that’s extreme, and that’s an oversold position, that’s a total buying opportunity,” Walsh said, adding that bond yield spreads could continue to be tight, which which will also be good for US stocks.

He expected stocks to gain more on positive global themes such as artificial intelligence (AI), energy and the reorientation of U.S. manufacturing, with the S&P 500 offering returns of 8% to 10% by the end of 2025

Walsh said there was some uncertainty about Trump’s policies and what his incoming administration actually implements, and also the risk that the U.S. economy will slow down more than currently anticipated.

“It’s like a game of ping pong … between policy and politics, and that’s going to create a lot of volatility around our (investment) themes this year,” Walsh said.

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(Reporting by Divya Chowdhury in Davos and Bansari Mayur Kamdar; Editing by Alexander Smith)