Fed set to cut rates, but forecast for rest of 2025 is key to markets with politics clouding the picture

## Fed Meeting Preview: Rates, Politics, and Potential Fireworks

The Federal Reserve is gearing up for a pivotal meeting this week, with a rate decision and economic forecasts on the agenda. However, the meeting is also charged with political intrigue, adding an extra layer of uncertainty. Here’s a breakdown of what to expect:

• Rate Decision: The Federal Open Market Committee (FOMC) is widely expected to lower the overnight borrowing rate by a quarter percentage point.
• Dot Plot: Officials will release their outlook for future interest rates, known as the “dot plot,” which will be closely watched for clues on the Fed’s future policy path.
• Political Influence: President Trump’s appointee, Stephen Miran, is likely to dissent, potentially advocating for a larger rate cut. Other governors may also disagree with the expected move.
• White House Pressure: The White House, including President Trump and Treasury Secretary Scott Bessent, has been publicly urging the Fed to cut rates aggressively.
• Market Expectations: Despite political pressure, markets largely anticipate a quarter-point cut, with a high probability of further cuts in the coming months.
• Dissenting Voices: Governors Christopher Waller and Michelle Bowman, along with some regional Fed presidents, may also dissent.
• Powell’s Role: Chair Jerome Powell’s post-meeting comments will be crucial, as his tone and guidance will shape market expectations.
• Economic Forecasts: The Fed will update its projections for GDP, unemployment, and inflation.

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