The Federal Reserve is widely expected to lower its benchmark interest rate by 25 basis points next week and again in December, according to a Reuters poll of economists, reflecting a shift toward additional easing amid economic uncertainty. 

The move follows the Fed’s first rate cut since December, as policymakers prioritize stabilizing the labor market over curbing inflation that remains above target. Nearly all economists surveyed, 115 out of 117, anticipate the federal funds rate will drop to a range of 3.75%–4.00% on October 29, while 71% expect another quarter-point cut in December. 

However, economists remain sharply divided on where rates will stand by the end of next year, with forecasts ranging between 2.25% and 4.00%, reflecting uncertainty over the economy’s trajectory and the pending succession of Chair Jerome Powell. Despite the uncertainty, markets have already fully priced in two more cuts

Finsum: The Fed faces a delicate balancing act as it weighs persistent inflation against signs of labor market softness, with some officials emphasizing job stability while others warn of reigniting price pressures.