The Future of Rate Cuts

As was widely expected, the Federal Reserve reduced its benchmark short-term rate to a range between 1.75 percent and 2 percent yesterday afternoon. That’s the second rate cut in as many months.

The big question now is if there will be another rate cut this year. Seven Fed officials said they believed there would be one more rate cut this year, while five indicated they thought this move would be the year’s last.  So they're nearly evenly split.

Five more members thought no move was needed after July, including at Wednesday’s meeting. While the seven who see another easing yet this year is not a majority, it is a sizable block.