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Predictions on the Federal Reserve's Monetary Policy
There is a strong consensus predicting a 25 basis point cut in the federal funds rate at the September meeting, followed by steady cuts of roughly a quarter point each quarter going forward. By the end of 2025, the target federal funds rate is expected to reach around three and a half to three and three-quarters percent. The consensus also includes holding off on rate cuts in November and having cuts roughly every other meeting throughout 2025. Despite not needing to see inflation at 2%, Powell is likely to cut the Fed funds rate based on progress towards maximum employment according to the dual mandate.