The Federal Reserve is expected to cut interest rates by 25 basis points on September 17 due to labor market weakness, with another cut likely next quarter. Stalling job growth prompted economists to revise forecasts, leading to expectations of three rate cuts this year. Markets have priced in a September cut, with a 4.00%-4.25% rate anticipated.

President Trump has criticized Powell for not cutting rates. Analysts predict a 25bp rate cut in September, with two expecting a 50bp reduction. Board members may dissent next week, advocating for a larger cut or hold. Inflation is projected to remain above 2% until 2027, while unemployment is expected to stay around 4.3%.

Economists anticipate a 75 basis point rate cut next year, bringing the fed funds rate to 3.00%-3.25%. A more dovish Fed chair could lead to further rate cuts in the second half of next year. Most experts do not foresee a significant erosion of the Fed’s independence during Powell’s term, which ends in May.

Read more at Yahoo Finance: September Fed rate cut a done deal, at least one more to follow by year-end: Reuters poll