Economists See Fed Rate Cut Next Week, at Least One More in 2025

Group 1 - The job market is showing signs of weakness, prompting expectations for a series of interest-rate cuts by the Federal Reserve, starting next week [1][3] - Economists surveyed predict a median of two rate cuts by the end of the year, with over 40% anticipating three cuts [2] - Investors are increasingly leaning towards the scenario of three rate cuts this year, with nearly 90% expecting a shift in the Fed's post-meeting statement to focus on labor-market risks [3] Group 2 - The unemployment rate rose to 4.3% in August, and recent data indicates a significant slowdown in hiring, challenging previous views of a solid labor market [5] - Chair Jerome Powell indicated the possibility of a rate cut due to a "shifting balance of risks" that could lead to rising unemployment [6] - By June 2026, the upper bound of the target range for the federal funds rate is expected to be 3.5%, a full percentage point lower than the current rate [7] Group 3 - Economists anticipate a divided Federal Open Market Committee (FOMC) next week, with potential dissents regarding the anticipated quarter-point cut [8]