All eyes are on the upcoming meeting of the US Federal Reserve amid growing expectations of another interest rate cut, in a move aimed at supporting the slowing labor market and maintaining the pace of economic growth.
According to a Reuters poll, 80% of economists expect the Federal Reserve to cut interest rates by 25 basis points in December, marking the third consecutive cut , reflecting continued concerns about weak employment and the effects of the longest government shutdown in U.S. history.
Despite these expectations, the disagreement within the Federal Open Market Committee persists, with Fed Chairman Jerome Powell warning that "the next cut is not guaranteed yet," stressing that the decision will depend on anticipated economic data after the federal government reopens.
Economic reports indicate that the personal consumption expenditures index – the Federal Reserve’s preferred measure of inflation – has remained stable above 2% for more than four years, raising concerns about losing control of prices if monetary policy is loosened too much.
Analysts believe that the government's reopening could help clarify the economic landscape, but continued uncertainty surrounding the labor market and inflation makes the December meeting a focus of global markets, especially as traders await movements in the dollar, stocks, and treasury bonds.
Josh Hurt , senior economist at Vanguard, said, "The Fed faces a real dilemma: Does it continue cutting interest rates to support employment, or does it pause to avoid fueling inflation?"
Other experts, however, asserted that any signal from Powell at the upcoming press conference would be enough to strongly move the markets, noting that the Fed's upcoming policy would determine the direction of the US dollar and global forex for the remainder of 2025 .
#USFederalBank #InterestRates #USEconomy #Forex #Dollar #GlobalMarkets #JeromePowell #Inflation #Gold #WallStreet #EconomicAnalysis #Investment #GlobalEconomy