Will the Fed Deliver Its Third Rate Cut This Month?

The debate inside the Federal Reserve is heating up again, as top officials weigh how aggressively to ease policy amid mixed economic signals. Fed Governor Christopher Waller has hinted at a cautious path, suggesting that gradual 25-basis-point cuts are the best way forward to avoid overstimulating the economy, while Cleveland Fed President Loretta Mester has voiced support for larger cuts to counter growing downside risks. With inflation cooling and the labor market showing early signs of softening, many analysts believe the Fed is approaching the point where another cut could help maintain economic momentum without reigniting price pressures. Market expectations are already reflecting strong confidence—odds of a 25-basis-point cut at this month’s meeting are hovering near 70–80%, signaling that investors are bracing for the central bank to stay proactive rather than reactive. Still, the Fed’s approach remains firmly data-driven; if upcoming reports show inflation remains sticky or job numbers surprise to the upside, policymakers could opt to pause and reassess. A larger 50-point move, though discussed, seems unlikely unless economic conditions deteriorate faster than expected. In essence, the Fed appears poised for another careful step in its easing cycle—a move that could ripple through global markets, lowering yields, lifting equities, and possibly injecting fresh momentum into the crypto and risk-asset space. Whether the cut lands this month or the next, it’s clear that monetary policy is entering a new phase of measured accommodation aimed at cushioning growth while keeping inflation expectations anchored.
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