Fed may cut rates by 25 bps in September: Survey

The Federal Reserve is expected to cut interest rates by 25 basis points in its next meeting in September— the first reduction this year — followed by another cut before the end of 2025, according to most economists surveyed by Reuters.

Sixty seven out of 110 economists polled, predicted a 25-basis-point cut to a range of 4%-4.25% at the meeting concluding on Sept. 17.

One economist anticipated a 50-basis-point cut, while 42 expected the Fed to keep rates unchanged.

Investors are awaiting upcoming inflation and jobs data, along with a speech by Fed Chair Jerome Powell at the central bank’s annual Jackson Hole conference later this month.

Meanwhile, Barclays economists wrote in a note that market participants are overly confident about a September rate cut, as they are misinterpreting the Federal Open Market Committee’s reading of labor conditions and its response.