Fed interest rate expectations

 

As of May 2, 2025, the Federal Reserve is expected to maintain the federal funds rate at its current target range of 4.25% to 4.50% during the upcoming policy meeting scheduled for May 7, 2025. This decision aligns with recent economic indicators, including a robust April jobs report showing 177,000 new jobs added and an unemployment rate steady at 4.2%, suggesting no immediate need for rate adjustments .

Market participants have adjusted their expectations, now anticipating the first rate cut to occur in July rather than June, with a total of three quarter-point reductions projected for the remainder of the year . The Federal Reserve has indicated that any future rate cuts will depend on clear evidence of rising unemployment or inflation moving closer to its 2% target .

For real-time tracking of interest rate expectations, the CME FedWatch Tool provides probabilities of rate changes based on 30-Day Fed Funds futures prices.

The next Federal Open Market Committee (FOMC) meeting is scheduled for May 7, 2025, at 2:00 PM ET