WASHINGTON, United States – The U.S. Federal Reserve is expected to announce its second interest rate cut this year on Wednesday. This comes despite continued uncertainty about the health of the U.S. economy due to the government shutdown that has been ongoing since October 1.
Analysts expect the key lending rate to be cut by a quarter percentage point, to between 3.75% and 4.00%. This is the central bank’s penultimate meeting of the year, amidst the lack of availability of most of the official data that monetary policymakers typically rely on.
The bank faces a dual challenge: supporting the weak labor market and maintaining inflation at its 2% target. Pressures remain high due to tariffs on major U.S. trading partners.
Diane Swonk, chief economist at KPMG, said the goal is to reach the right decision on interest rates using an imperfect tool. She emphasized that the bank may also announce the end of its budget consolidation program next week in the face of rising liquidity risks.
This move comes amid repeated political pressure from the Trump administration on Fed officials, including Chairman Jerome Powell. Powell will step down next year, protecting key employees from legal impeachment attempts.
