The Federal Reserve is expected to announce its next interest rate cut on September 17, 2025. This will likely be a 25 basis point reduction, lowering the federal funds rate target range from 4.25%-4.50% to 4.00%-4.25%. Market consensus and economists nearly unanimously anticipate this as the first rate cut of the year, driven by signs of labor market weakness amid still-elevated inflation concerns. Furthermore, there is an expectation of additional rate cuts later in 2025, possibly two or three more cuts before the end of the year, although there is some division among officials about the pace and size of future cuts.
