Investors fear the US Fed may not cut rates in FOMC’s October meeting

Last week, the expectation from the US Fed was that the FOMC would cut the interest rate twice in 2025. But recent developments may have altered this outlook rapidly. Higher-than-expected inflation could make the US Fed keep rates unchanged in October.

Rate Cut Expectations

US stock market investors are scrambling for answers on whether Fed chief Powell will continue with the rate cut campaign in October and then in December. The economy’s strength, despite tariff pressures, may lessen the need for the Fed to cut rates. September 2025 CPI data are scheduled to be released on October 15.

Federal Reserve Bank of Kansas City President Jeff Schmid signaled the US central bank may not need to lower interest rates again soon, citing the need to keep bringing down inflation, reports Bloomberg.