Here is the remaining seating schedule of 2025 and the prospects for interest rates for 2025

The Federal Open Market Committee has seven remaining planned meetings for 2025 with the next March 19. The expectation of fixed income markets is that interest rates are most likely to be reduced two or three times in 2025. However, these cuts can be weighted in some cuts later in the year, with the next interest reduction most likely in June. There was no change in interest rates when the FOMC met in January.

The meeting of the FOMC meeting

The next two interest decisions of the FOMC on May 19 and 7 are less likely to be the interest rate with short -term interest rates, which will probably remain at the current level from 4.25% to 4.5%. There is currently a very slim chance that an interest reduction in March will have a very slim March interest reduction.

However, the fixed income markets projects that until July 18 or 30, one or possibly even two interest rate reductions will become more likely. The markets have less clarity for the remaining three meetings of the year with numerous economic data. Nevertheless, the last three planned interest decisions of September 17, October 29 and December 10 will probably be at least one or perhaps two more interest reductions compared to previous meetings.

Overall, the view of the market is that interest rates almost decrease in 2025, with the main question of how much. For example, Jerome Powell did not find the question of whether the rates are lower, but how quickly. “With our political attitude, which is now significantly less restrictive than it was and the economy remains strong, we don't have to be in a hurry to adapt our political attitude. We know that the reduction in political reluctance could hinder progress too quickly or too much.” 2025.

How the FOMC reacts to incoming data

The FOMC expects inflation to get closer to its annual 2% goal of the rest of 2025. The tariffs have the potential to complicate this picture by increasing the prices for imported goods. Nevertheless, the FOMC could decide to get a unique prices. Adriana Kugler, governor of the Federal Reserve, indicated this saying: “The potential net effect of new economic policy remains very uncertain and depends on the width, the duration, the reactions on and above all the details of the measures adopted in a speech on February 20.

Risks for growth

The FOMC not only looks at inflation, and the market may be a little worried that the Fed may have to act in order to maintain the level of employment. A recently carried out wildcard are some early indications that the consumer may become softer and that the workplace market may lose a little dynamic. This data is difficult to analyze, since part of it is more due to consumer and business fear over tariffs than hard data on current economic realities. Nevertheless, economic fears themselves can be fulfilling if they lead to tangible actions such as households, the budgets and companies that delay the expenses.

Rate cuts probably in most scenarios

Overall, the FOMC can reduce the rates if disinflation brings inflation closer to the goal or if the growth of jobs slowed down and the potential need to strengthen the economy. One of them is a relatively rosy economic scenario, the other less, but one or both would probably cut a rate through the FOMC.

What you can expect for interest rates in 2025

Ultimately, it seems likely that several interest reductions take place in 2025. As Fed Governor Christopher Waller said on February 18, “waiting for economic uncertainty to dissolve is a recipe for political paralysis.” However, what the economic data unveiled in the coming months will inform how aggressively the FOMC is in 2025 in the reduction of the installments.