A Reuters poll shows that nearly all 107 economists predict the Federal Reserve will implement a 25 basis point cut in its key interest rate on September 17, with most experts predicting further rate cuts in the first quarter of next year. The market has fully priced in the September rate cut and now expects three rate cuts this year, compared to just two a few weeks ago. Sixty-four of the 107 economists (60%) expect a cumulative rate cut of 50 basis points by the end of 2025, while 37% predict a 75 basis point cut this year, a significant increase from 22% in August. Twenty-six economists say a surge in inflation or a combination of inflation and rapid unemployment is more likely in the coming year. The median poll predicts the Fed will cut another 75 basis points next year, bringing the federal funds rate to 3.00%-3.25%.
