Based on extensive searches across financial news outlets, market analysis tools, and economist surveys, the probability of a U.S. Federal Reserve interest rate cut at the September 17-18, 2025, FOMC meeting is overwhelmingly high, approaching certainty. Market pricing from futures contracts, as tracked by tools like the CME FedWatch, indicates a 100% likelihood of at least a 25 basis point (bps) reduction in the federal funds rate, dropping it from the current 4.25%-4.50% range. This aligns with recent inflation data showing moderate increases (e.g., August CPI at 2.7% year-over-year) and softening labor market indicators, such as August job growth stalling at under 100,000 new positions and unemployment rising to 4.3%.
Breaking it down by cut size:
25 bps cut (to 4.00%-4.25%): This is the most anticipated outcome, with probabilities ranging from 85% to 92% across recent reports. Economists and traders cite balanced risks between lingering inflation pressures (potentially exacerbated by tariffs) and downside labor risks as reasons for a measured initial
50 bps cut (to 3.75%-4.00%): There's a smaller but notable chance, estimated at 10-20%, particularly following the weak August jobs report. Some analysts, including those at Standard Chartered and Bank of America, have shifted toward this view if upcoming data (e.g., August PCE inflation due next week) confirms further labor weakness.
No cut or hold steady: Virtually zero probability in current pricing, as Fed Chair Jerome Powell and officials like Governor Christopher Waller have signaled readiness to ease policy amid rising job market risks, even with core inflation around 3%.
A Reuters poll of over 100 economists reinforces this, with 98% expecting at least a 25 bps cut, and most forecasting one additional cut by year-end.Overall, the consensus from sources like Reuters, Bloomberg, Fortune, and Investopedia points to a dovish Fed prioritizing employment support over strict inflation targeting, though any surprise in next week's CPI or PCE data could slightly adjust these odds.
Anish Jagdish Parashar
Indirect tax india online research
Disclaimer: Content reflects personal views of the author and for trading and investment purposes consult your financial advisor.
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