Fed Is Likely to Cut Rates Again as ‘Insurance’ Against a Weakening Economy

Core Viewpoint - The Federal Reserve is anticipated to cut interest rates by 0.25 percentage points to a target range of 3.75%-4.00% during its upcoming policy meeting, following a similar cut in September, marking the first reduction of the federal-funds rate this year [1][2]. Group 1 - The government shutdown has hindered the Fed's access to official economic reports, prompting officials to rely on private surveys, state data, and financial-market signals to inform their decisions [2]. - With a cooling job market and inflation remaining approximately one percentage point above the Fed's 2% target, officials are cautiously balancing their dual mandate, favoring a small pre-emptive rate cut in September to mitigate potential economic downturns [2][3]. - Investors are expected to focus on the tone of the Fed's press release and Chair Jerome Powell's post-meeting press conference, rather than the immediate policy decision, as they look for indications regarding the December meeting [3].