The FED paused the interest rate cuts, which began in September 2024, in January 2025.
The FED’s interest rate decision in July, which has kept interest rates steady since January, is eagerly awaited.
With just one week left until the Fed announces its highly anticipated interest rate decision, Reuters conducted a survey with the participation of 105 economists.
A majority of economists in a Reuters poll said the Fed’s independence was under threat from increasing political interference.
According to the results, while there is uncertainty regarding interest rate cut expectations for 2025, no one expects an interest rate cut in July.
More than 70% of economists in a Reuters poll conducted July 17-23 said they were concerned about the Fed’s independence due to political pressure.
Ten people said they were very worried. The remaining 14 said they were not worried.
All 105 economists said the Fed, which cut its key interest rate to 4.25%-4.50% in December, would leave interest rates steady in July.
A 53% majority of economists (56 out of 105) predict a Fed rate cut in September, consistent with market pricing.
However, there is still no clear consensus among economists on how much interest rates should be reduced by the end of 2025.
At this point, about two-thirds of economists expect one or two rate cuts this year, while almost a fifth expect no cuts at all.
“Tariffs could both increase inflation and slow the economy,” said Jonathan Millar, senior U.S. economist at Barclays. “The Fed doesn’t know exactly what the mix will be, and that’s reason enough to wait.”
*This is not investment advice.