WASHINGTON–The Federal Reserve will conclude two days of meetings by the Federal Open Market Committee (FOMC) today, and most analysts are predicting it will announce a reduction in rates.
The only question for many is how big the cut will be — 25 or 50 basis points. President Trump has been pressuring the Fed to make a big rate cut.
The Fed funds rate is currently set at 4.25% to 4.5%.
As the CU Daily reported here, analysts say the decision facing the Fed is complicated, as jobs are declining at the same time prices have been increasing.
‘Worst Kind of Set-Up’
“It’s the worst kind of setup for the Fed,” Claudia Sahm, New Century Advisors chief economist and former Federal Reserve Board economist, told Yahoo Finance. “They will not be cutting because we have good news on inflation. They’ll be cutting because we have bad news on employment.”
Sahm told Yahoo Finance the Federal Reserve is expected to cut rates by 25 basis points during its two-day meeting this week, adding that in her view inflation is “still too firm.”
Other strategists told Yahoo Finance they agree.
“Inflation is still elevated. It’s been elevated, and it’s moving in the wrong direction right now,” Collin Martin, fixed-income strategist at Schwab Center for Financial Research, told the outlet.
Not a ‘Lock’
RSM chief economist Joe Brusuelas said, “Yes, you’re going to get your rate cut out there in trading land. But I have to tell you, the underlying tenor of the data doesn’t suggest that it’s a lock that you’re going to get three rate cuts before the end of the year.”
As the CU Daily has reported, a revision of jobs data released last week showed the U.S. employed 911,000 fewer people between April 2024 and March 2025 than originally reported.
