Fed has a rate cut plus a bunch of other things on its plate this week
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Jerome Powell, chairman of the US Federal Reserve, during the International Monetary Fund (IMF) and World Bank Fall meetings at the IMF headquarters in Washington, DC, US, on Thursday, Oct. 16, 2025. Kent Nishimura | Bloomberg | Getty Images The easy part for the Federal Reserve on Wednesday will be announcing an interest rate cut when it wraps up its two-day policy meeting. The hard part will be taking care of other details that are presenting substantial challenges to policymaking these days. Markets are assigning a nearly 100% probability that the Federal Open Market Committee will approve a second consecutive quarter percentage point, or 25 basis point, reduction in the federal funds rate. The overnight lending benchmark is currently targeted between 4%-4.25%. Beyond that, policymakers are likely to debate, among other things, the future path of reductions, the challenges posed by a lack of economic data and the timetable for ending the reduction in its asset portfolio of Treasurys and mortgage-backed securities. Underlining all of those deliberations will be a growing divergence of opinion over what the future holds for monetary policy. “They are at a moment in the policy cycle where there’s genuine disagreement between people who are thinking we will probably cut rates but I’m not ready to cut again just yet, and people who think even though there’s risks, it’s time to do more now,” said Bill English, a Yale professor and the Fed’s former director of monetary affairs. “There’s dissent between people who want to cut now, and people who want to wait and see a bit more.” Judging by recent statements and prevailing Wall Street sentiment, newly appointed Governor Stephen Miran is likely to dissent in favor of a bigger cut, as he did at the September FOMC meeting. At the same time, regional Presidents…
Filed under: News - @ October 28, 2025 7:30 pm