Next Fed Meeting September 2025: Rate Cut Likely, Powell’s Tone in Focus

The Federal Reserve’s upcoming policy meeting on September 16–17 is shaping up to be one of the most closely watched events of the year. With unemployment rising and inflation proving stubborn, investors are eager to see whether Chair Jerome Powell and his colleagues will deliver the widely expected rate cut — and, more importantly, what forward guidance they will offer.

What to Know

• Meeting date: September 16–17, 2025
• Expected move: Markets price in a 93% chance of a 25 bps rate cut
• Powell’s role: His tone on future cuts may sway markets as much as the decision itself
• Key data: Inflation remains above 2% target; unemployment is climbing
• Politics at play: Trump’s push for lower rates and Fed board disputes may complicate matters

When Is the Next Fed Meeting?

The Federal Open Market Committee (FOMC) will convene on Tuesday and Wednesday, September 16–17, 2025.At this meeting, policymakers will vote on the federal funds rate and update their Summary of Economic Projections (SEP), offering clues about growth, inflation, and interest rate paths.

Markets are pricing in a 93% probability of a quarter-point cut, which would take rates to a 4.00%–4.25% range, according to the CME FedWatch tool. There is also a slim chance of a larger half-point cut, though that remains unlikely.

Why the September Fed Meeting Matters

This meeting comes at a critical moment for the U.S. economy:

• Inflation: August CPI rose to 2.9% YoY, while core inflation ticked higher to 3.1% — still above the Fed’s 2% target.
• Employment: Jobless claims recently climbed to their highest since 2021, raising concerns that the labor market is cooling.
• Yields: Treasury yields remain steady, with the 10-year note holding near 4.06%, signaling investor caution.

The balancing act between inflation control and supporting employment will shape Powell’s messaging — and investor reaction.

Powell’s Tone: Hawkish or Dovish?

While a rate cut looks almost certain, Powell’s press conference could prove more market-moving than the decision itself. If he emphasizes inflation risks, markets may scale back expectations for further cuts. But if he acknowledges rising unemployment as a greater concern, it could signal a dovish shift and encourage risk assets.

Politics and Fed Drama

The September meeting also carries unusual political undertones:

• Lisa Cook’s seat is under dispute after Trump attempted to remove her; a judge has temporarily blocked the move.
• Stephen Miran, Trump’s Fed nominee, awaits Senate approval, leaving uncertainty about who will have voting power this month.

Such tensions could influence how united the Fed appears when announcing its decision.

What Happened at the Last Fed Meeting?

In July, the Fed kept rates unchanged for a fifth straight meeting, despite dissent from two members who pushed for a quarter-point cut. Officials noted that inflation pressures and tariffs continued to complicate the outlook.

Q&A: Fed Meeting September 2025

When is the next Fed meeting?

September 16–17, 2025.

Will the Fed cut rates?

Markets expect a 25 basis point cut with 93% probability.

What are Powell’s challenges?

Balancing stubborn inflation against weakening labor data while navigating political pressure from Trump.

Why does this meeting matter?

A: It could set the tone for U.S. monetary policy into late 2025, shaping everything from Treasury yields to global gold and forex markets.

Bottom Line

The September Fed meeting is about more than just the rate cut — it’s about Powell’s guidance. With inflation running hot, unemployment climbing, and political pressure intensifying, the Fed’s decision and tone will ripple across markets worldwide.

Read more: Understanding Fed Rate Cuts: Impact on Crypto, Stocks, and the Economy