Federal Reserve to Cut Interest Rates: Analysts | Entrepreneur

"The Federal Reserve, which last cut interest rates in December 2024, is expected to reveal its first rate cut of the year on Wednesday. Economists and industry experts predicted a 94% chance of a quarter percentage point (0.25%) cut, following data released earlier this month that showed that hiring was slowing, and inflation was 2.9% in August, an increase from July's 2.7% and higher than the Fed's preferred 2% target."

"The central bank's rate-setting committee, the Federal Open Market Committee (FOMC), has kept interest rates within the 4.25% to 4.5% range for the past nine months as its members analyze economic activity. The FOMC decides on rate cuts based on two broad goals: minimizing inflation and maximizing economic activity in the labor market. Related: The Labor Market Has Changed From the 'Great Resignation' to the 'Great Stay' Because 'Workers Aren't Going Anywhere'"

"President Donald Trump has been pressuring Federal Reserve Chair Jerome Powell to cut interest rates, writing in a Truth Social post earlier this week that Powell "MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND." Experts say the increased political attention on the Fed has increased expectations of a rate cut. "The recent political noise could influence market expectations," Daco told Entrepreneur."

The Federal Reserve, which last lowered rates in December 2024, is expected to announce a 0.25% rate cut. Economists and industry experts assigned a 94% probability to the quarter-point reduction after data showed slowing hiring and inflation at 2.9% in August, above the Fed's 2% target. The Federal Open Market Committee has held the policy range at 4.25%–4.5% for nine months while weighing inflation control against labor-market strength. EY-Parthenon Chief Economist Gregory Daco said inflation is picking up while employment and economic activity are slowing, tilting the balance toward cuts and forecasting two more reductions. Political pressure from President Donald Trump has amplified market expectations.

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