Fed Expected to Cut Rates to 3.5% Today, But Will Cheaper Money Last Until 2026?

The U.S. Federal Reserve is expected to announce a 0.25 cut to the base rate today, bringing it down to 3.5, according to speculators on the CME FedWatch Fed funds futures index. This move is priced in at a level of certainty approaching 90, indicating a high likelihood of the rate cut. However, the same index suggests that there is no certainty for any further cuts in 2026, with only a 41.9% plurality emerging in June for a further cut to 3.25. According to analysts, the uncertainty surrounding the future rate cuts is largely due to the upcoming change in leadership at the Federal Reserve, with President Trump set to replace Chairman Jerome Powell with a new Fed chair in May. "We see the Fed cutting rates twice in 2026, with moves in March and in June," said James Knightley, an analyst at ING. "The potential for a more dovish FOMC tilts the risks toward additional rate cuts later in the year." The Federal Reserve's decision to cut interest rates is a significant move that has implications for the economy and financial markets. The rate cut is expected to provide a boost to economic growth, particularly in the face of rising inflation and a slowing economy. However, the uncertainty surrounding future rate cuts has left investors and analysts guessing about the Fed's next move. The CME FedWatch Fed funds futures index has been closely watched by investors and analysts as a gauge of the market's expectations for future rate cuts. The index shows that the market is pricing in a high likelihood of a rate cut today, but is less certain about future cuts. "The FedWatch index is a useful tool for understanding market expectations, but it's not a guarantee of future rate cuts," said a Fed spokesperson. The Federal Reserve's decision to cut interest rates is also significant in light of the upcoming change in leadership. The new Fed chair will likely have a significant impact on the Fed's monetary policy, and could potentially lead to further rate cuts. "The new Fed chair will have a significant role in shaping the Fed's monetary policy, and could potentially lead to further rate cuts," said a market analyst. The current status of the economy and financial markets is a key factor in the Federal Reserve's decision to cut interest rates. The economy has been slowing in recent months, and inflation has been rising. The rate cut is expected to provide a boost to economic growth, but the uncertainty surrounding future rate cuts has left investors and analysts guessing about the Fed's next move. In the coming weeks and months, investors and analysts will be closely watching the Federal Reserve's actions and statements for clues about future rate cuts. The new Fed chair will likely have a significant impact on the Fed's monetary policy, and could potentially lead to further rate cuts. As the economy and financial markets continue to evolve, the Federal Reserve's decision to cut interest rates will be closely watched by investors and analysts around the world.