US Fed Meeting LIVE: Powell Expected To Declare First Rate Cut Since 2024; Dow, S&P 500 Trade Mixed
The US Federal Reserve is poised to deliver its first interest rate cut since 2024, with markets almost fully pricing in a 25-basis-point move.
US Fed Meeting Live: More Rate Cuts Lined Up?
Most economists expect the Fed to signal two rate cuts in 2025, matching June's projections, meaning one more cut in either October or December.
But over 40% of economists see the Fed penciling in three cuts this year, with fresh projections set to show policymakers' outlook on inflation and jobs, as per news agency Bloomberg.
US Fed Meeting Live: Potential Fed Dissents Loom
Even with a quarter-point cut widely expected, officials may split. Some want a deeper reduction, while others prefer holding steady.
Fed Governors Christopher Waller and Michelle Bowman, both Trump appointees, had opposed July's pause, citing labor market worries.
US Fed Meeting Live: Committee Shake-Up Under Scrutiny
While markets focus on the Fed's expected rate cut, the makeup of its rate-setting committee is under the spotlight.
Trump ally Stephen Miran was sworn in Tuesday, just in time for the meeting, though critics question his independence since he only took unpaid leave from his White House role.
Meanwhile, an appeals court ruled that Fed Governor Lisa Cook can remain in her post as she challenges Trump's bid to fire her. The administration plans to take the case to the Supreme Court.
US Fed Meeting Live: The Macro Picture
The backdrop for the FoMC September meet is pretty fragile: the US economy added just 22,000 jobs in August, the weakest print since the pandemic rebound, while unemployment rose to its highest level in nearly four years. A string of downward revisions to earlier reports has further deepened concerns about labor market momentum.
US Fed Chief Powell himself acknowledged at Jackson Hole that risks are skewed: "In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside — a challenging situation."
US Fed Meet Live: What's The Probability Of A 25 Basis-Points Cut?
Traders are betting overwhelmingly on a small cut. CME's FedWatch tool pegs the probability of a 25 basis points cut at 94%, with only a slim chance of a deeper 50 basis points move. The Fed's key rate currently sits between 4.25% and 4.5%.
