when will the fed cut rates

The Federal Reserve is expected to start cutting interest rates in the second half of 2025, with the first cut likely in September 2025. Most economists predict a 25 basis point cut at the September 17, 2025, FOMC meeting, which would bring the federal funds rate down from the current 4.25%-4.50%. There may be at least one more cut before the end of the year, possibly two, depending on economic conditions such as inflation, tariffs, and labor market strength. The Fed is then expected to continue cutting rates intermittently into 2026 and 2027. Overall, the rate cuts in 2025 are expected to total about 0.50 percentage points (two cuts), with additional cuts in the following years aiming to bring the rate to around 2.25%-2.50% by the end of 2027.