Experts expect second straight interest rate cut after Fed meeting

The U.S. Federal Reserve is expected to meet Wednesday to make a decision on whether to cut interest rates.

Experts expect the Federal Open Market Committee, the policy-making arm of the Fed, to lower interest rates for a second time since September to boost a weakening job market and limit inflation, according to ABC News.

In its September statement, the FOMC predicted it would lower benchmark interest rates through two quarter-point cuts by the end of the year. President Donald Trump, however, has called for cuts up to 3%.

"Concerns about tariffs driving prices higher are still not showing up in most categories," Scott Helfstein, Global X's head of investment strategy, told CBS News on Friday. "Nothing in the inflation print should stop the Fed from cutting rates next week. Yes, prices are higher, but not enough to keep them from helping the economy."

The FOMC is limited, though, in the key economic data it typically uses to make such decisions due to the government shutdown, including the monthly jobs report, gross domestic product, trade data, housing information, retail sales, and manufacturing and inventory statistics.

The Bureau of Labor Statistics made the unusual call to bring back workers earlier this month to work on and release the Consumer Price Index report for the third quarter. The report showed inflation rose to 3% in September. The Social Security Administration increased the annual cost-of-living benefit by $56 per month to 2.8% for 2026.

NPR reported that without the economic data, the FOMC may be turning to other indicators of the economy, such as data from the payroll processing company ADP. A report released Tuesday showed a small increase in private-sector hiring for the month ending in mid-October.

"We're seeing some improvement, but that improvement is tepid, and it is preliminary," ADP chief economist Nela Richardson said. "As the weeks progress, we might see further weakness."

The FOMC is expected to release its statement on interest rates around 2 p.m.