Experts Predict 25 Basis Point Fed Rate Cut in September

Economists are widely anticipating a 25 basis point interest rate decrease by the Federal Reserve at their upcoming meeting, scheduled for September 17th at 9 p.m. ET. The decision will officially be announced later that evening. Discussions also revolve around potential further cuts in rate policy before year’s end. A slowdown in job growth is adding fuel to the expectation of a more modest rate cut. Employment figures remained stagnant in August, with revisions highlighting a downward trend in the labor market over the past year. This economic development has prompted economists to prioritize employment conditions above inflation concerns as they weigh their predictions for the Federal Reserve’s next move. 60% of economists surveyed predict additional rate cuts by the end of the year, while 37% anticipate a total cut of 75 basis points. The expectation is that consumer prices will remain above the Federal Reserve’s 2% target until at least 2027. A majority (92.7%) of market participants believe the Fed will proceed with a 25-basis-point rate cut on September 17th, while only 7.3% predict a more significant 50 basis point cut. While economists largely agree on the impending rate reduction, differing opinions exist among financial institutions and political figures. Standard Chartered predicts a 50 basis point cut to address potential labor market concerns, while President Donald Trump has called for a larger cut of 75 to 100 basis points. Notably, internal divisions amongst Fed members remain concerning as some previously opposed static rates are now poised to make their influence known at the September meeting.