Fed Expected to Deliver Another 25bps Rate Cut
The Fed is expected to lower the federal funds rate by 25bps at its October 2025 meeting, bringing the target range to 3.75%–4.00%. It would follow a similar cut in September, reducing borrowing costs to their lowest level since 2022.
Markets will closely watch for any guidance for December, though policymakers are not expected to offer significant new insights. The policy backdrop has become more uncertain amid the government shutdown, which has delayed the release of key economic indicators.
Among the limited data available, the CPI report showed headline inflation inching up to 3%, while core inflation eased slightly to the same level. ADP data showed the private sector added an average of 14,250 jobs per week in the 4 weeks ending October 11, while a Chicago Fed estimate suggested that the September unemployment rate remained largely unchanged at 4.34%.
In addition, traders expect the FOMC to consider halting the runoff of Treasury securities from its $6.6 trillion balance sheet.
Source: Tradingeconomics.com
