Washington, 12 September 2025 – A growing number of economists are now betting that the U.S. Federal Reserve will slash interest rates at its upcoming meeting next week, with many expecting at least one more cut before the end of 2025. The shift in sentiment follows signs of softening in the labor market and inflation data that, while elevated, may no longer justify the current level of restrictive monetary policy.
In a survey conducted by Bloomberg News, a consensus has emerged: the most likely path includes two rate cuts during the remainder of the year. However, more than 40% of those surveyed believe there will be three reductions, indicating that expectations are tilted toward more aggressive easing if conditions continue to weaken. Among those forecasting only two cuts, opinions are divided over timing, with some pointing to October and others expecting the second move in December. Bloomberg
Key economic data have reinforced these expectations. Recent inflation figures during August showed a modest increase, while core inflation rose in line with forecasts. At the same time, reports of rising jobless claims and weaker employment gains are raising concerns that the labor market may be cooling faster than previously thought — a factor that could embolden the Fed to start easing interest rates sooner.
Financial markets are responding: interest rate futures are now heavily pricing in a 25-basis-point cut at the upcoming meeting, almost as a baseline outcome. The magnitude and timing of further cuts will likely depend on upcoming inflation data, labor statistics, and how persistent inflationary pressures remain.
