Fed prepares for its first rate cut of 2025, raising questions about a broader easing cycle
The Federal Reserve is widely expected to deliver its first interest rate cut of 2025 this week, a move that could set the tone for the rest of the year. But for traders and investors, the key question is not whether the Fed will cut—it’s how many more cuts could follow as the central bank faces a fragile job market, stubborn inflation, and mounting political pressure from the White House.
One of the most closely watched signals will come from the Fed’s quarterly “dot plot”—a chart showing where policymakers expect interest rates to head over the coming months.
The Fed still has two additional meetings scheduled this year—in late October and December.
The Fed’s decision to hold rates between 4.25%–4.5% for most of 2025 has frustrated President Trump, who has been openly pressuring the central bank to act faster.
A rate cut this week is already priced in, but the market reaction will depend heavily on:
For traders, this Fed meeting is not just about one rate cut—it’s about whether the dollar enters a prolonged period of weakness as US monetary policy pivots toward easing.
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