The U.S. Federal Reserve is expected to announce another quarter-point interest rate cut this week, its second this year as policymakers move to cushion a slowing labour market and maintain economic stability.
Analysts predict the rate reduction will bring the federal funds rate to between 3.75% and 4.00%, with more cuts likely in December or January.
The move follows a steady rise in unemployment claims and milder inflation data, including a 3% annual increase in the consumer price index through September.
The Fed’s previous statement hinted at “additional adjustments” to policy rates, a language that Vice Chair Michelle Bowman said signaled future rate cuts.
JP Morgan’s Chief U.S. Economist, Michael Feroli, noted that any attempt to tone down this language might appear “too hawkish” for the Fed’s leadership.
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However, Fed Chair Jerome Powell is expected to remain cautious in his post-meeting remarks, avoiding firm commitments on future policy moves.
The central bank is also navigating uncertainty tied to the ongoing government shutdown, which has delayed key economic data releases, including unemployment figures.
Deutsche Bank economists said Powell will likely “keep options open” until more data becomes available before the next meeting in December.
Meanwhile, internal divisions persist among Fed officials. Some policymakers urge restraint on easing, citing concerns over inflation still above the 2% target. Others, however, argue for deeper cuts to prevent further job market deterioration.
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New Fed Governor Stephen Miran may once again dissent, pushing for a bolder half-point cut as he did in September.
Beyond the rate decision, analysts expect the Fed may soon end its balance sheet reduction program, known as quantitative tightening, possibly signaling a shift toward more accommodative monetary policy in the months ahead.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
