The Fed prepares to define the first rate cut of the year, already discounted by Wall Street

According to Fedwatch that CME Group performs, the market actors They assign 96.1% probability that the Federal Open Market Committee (FOMC) of the Fed Decide a 25 basic point cut in the reference rateto the area of ​​4%-4.25%.

While, forward, Chances are assigned above 70% for new 25 -point cuts For meetings of October 29 and December 10.

Rates: what do analysts expect

The Director of Fixed Income Strategy of the Schwab Center for Financial Research, Collin Martinhe argued that “the Fed is likely to cut the guys this Wednesday, but The resilience of the economy and an inflation superior to the objective could prevent the Fed from cutting so much as the markets expect in the next quarters. “

In addition, in their latest market analysis, experts from Blackrock They stated that “The Federal Reserve is likely to resume the trimming of interest rates this week”. They said that “The deceleration of the labor market gives the fed margin to cutwhich helps relieve political tensions that occur due to the increase in interest rates. “

And they added: “We believe that feat cuts, in the midst of a remarkable slowdown of the activity without recession, They should promote US actions and the artificial intelligence sector“

The keys: Powell’s speech and Dot Plot

For its part, from Personal Investor Portfolio (PPI) They stressed that it will be “very important what Jerome Powell has to say and the projections –especially the “dot plot”– That the agency publishes in just four of the eight annual meetings. “

The “DOT PLOT” of the Fed shows the individual projections of the FOMC members on where interest rates should be at the end of the current year and in the coming years. For its part, after presenting the result, Powell will give its traditional press conference.

“Both elements They will help the market to understand if the ‘Wait & See’ stage ended and If the priority becomes the job within its dual mandate“Bróker analysts raised.

The tension in the small table of the Fed

This Tuesday it was confirmed that the governor of the Fed, Lisa Cook, will be part of the monetary policy meeting, after the American justice stopped Trump’s attempt to throw her out of his position for allegedly committing mortgage fraud.

For its part, Stephen Miran joined the Fed Board to occupy the vacancy left by Adriana Kuglerwho resigned in August 2025, and will complete the remaining mandate that expires in January 2026.

It is not a minor fact that Mira served as president of the Blanca House Economic Advisors Council, a position he assumed in March of this year.

Trump already had two “allies” on the Board of Directors: Governors Michelle Bowman and Christopher Waller, both appointed during their first mandate.

Miran’s “third mandate”

A novelty that caused discomfort in the previous meeting was the mention they made look at a “third mandate” that the Fed must meet: Maintain long -term rates at moderate levels. It is worth clarifying that long rates are those that determine how much an American pays for their mortgage or companies to be financed.

“For decades, In Wall Street it was assumed as a fact that the FED had a dual mandate: price stability and maximum employment“PPI explained.” Look simply cited the letter of the Federal Reserve Law, which effectively includes that phrase, but that in practice was always considered a natural consequence of handling inflation and employment, Not an explicit objective of politics“They detailed.

The now member of the Federal Reserve was the one who promoted the Mar-A-Lago agreement at the beginning of the yearan economic policy project that proposes devaluate the dollar, improve the result of the commercial balance and make “a more active use of the Fed balance and negotiation with foreign debt holders to restructure maturities. “

For this reason, his sayings about the “third mandate”, “Revive the ghost of a less independent and more aligned Fed with the political objectives of the White House, with the risk of implementing unconventional tools to control the long part of the curve, even in a context of inflation still above the goal.”