Overview

• Economists and traders largely anticipate a 25 basis-point reduction at Wednesday’s meeting, which would be the first Fed cut of the year.
• Recent labor data showing slowing hiring and softer sentiment underpin expectations for easing, with some analysts noting higher recession risks.
• Consumer inflation reached 2.9% in August, a pickup that could constrain how quickly policymakers proceed with further reductions.
• Political pressure has intensified as President Trump pushes for lower rates, moves to oust Governor Lisa Cook face a legal challenge, and Stephen Miran advances to fill the vacancy left by Adriana Kugler.
• Investors will parse any signs of division over a 25 or 50 basis-point move versus holding steady and look for guidance on the trajectory of additional cuts during a week packed with decisions by the Bank of Canada, Bank of England and Bank of Japan.