A potential interest rate cut by the Federal Reserve may occur in September, as indicated by economists' surveys.
Economists' Expectations
According to a Reuters poll, a majority of the 107 surveyed economists expect a 25 basis point cut, which would adjust the target rate range to 4.00–4.25 percent. Only a small minority of respondents suggest a larger cut of 50 basis points might occur.
Economic Forecast
Market projections currently include the possibility of three rate cuts in the next year. Within the survey group, 60% foresee another 50 basis point reduction by year-end, while 37% predict a total cut of 75 basis points. Furthermore, there is consensus that consumer inflation will stay above the Fed’s 2% target until 2027.
Internal Debates within the Fed
Disagreements persist regarding rate policy within the Federal Reserve, with members previously opposed to static rates now potentially changing their views. This internal debate could influence upcoming decisions. Economists foresee that by 2026, cumulative cuts of 75 basis points could bring rates down to 3.00–3.25 percent.
The anticipated interest rate cuts by the Federal Reserve carry significant implications for the economy, as policymakers navigate between job stabilization and inflation management.
