Potential for Two More Rate Cuts by Year-End, Despite Shutdown: Insights from Fed Officials
Federal Reserve officials remain divided on the direction of monetary policy. A slight majority are favoring quarter-point rate cuts at each of the two remaining meetings this year. This information is according to the minutes from the September 16-17 meeting, released October 9, 2025.
The Federal Open Market Committee voted 11-1 to lower the benchmark interest rate by 0.25 percentage points. This brought the federal funds rate to a target range of 4%-4.25%. However, policymakers expressed varying views on the appropriate pace of future cuts. Projection materials indicate the likelihood of one more cut in both 2026 and 2027.
The ongoing government shutdown adds complexity to the Fed’s decision-making process. Key economic data from the Labor and Commerce departments has been suspended. If the shutdown continues through the Fed’s October 28-29 meeting, policymakers will be operating without crucial inflation, unemployment, and consumer spending metrics.
Treasury Secretary Scott Bessent warned that the shutdown could negatively impact GDP growth. He stated the closure represents “a hit to growth and a hit to working America.” Market expectations remain for at least two more 25 basis point cuts by year-end.
- Source: CNBC Federal Reserve Coverage