Fed Rate Decision September 2025 – What happens on September 17? 94% chance of 25 bps cut. Latest updates from CME FedWatch Tool, expert opinions and market impact analysis.
- 1 Fed Rate Decision Wave Coming – Will Bullish Bets Survive?
- 2 September 2025 Fed Rate Cut – Is It a Done Deal?
- 3 Expert Opinion – What Are Specialists Saying?
- 4 Fed Rate Cut Impact on Markets
- 5 Gold and Commodities
- 6 Bond Market and Treasury Yields
- 7 Currency and International Impact
- 8 What’s Next? – Future Outlook
Fed Rate Decision Wave Coming – Will Bullish Bets Survive?
The American central bank Federal Reserve is about to make a crucial decision on September 17, 2025 that will affect markets worldwide. Market experts and traders are closely watching whether the Fed will cut interest rates or not. Let’s understand what this decision means and how it might impact your investments.
September 2025 Fed Rate Cut – Is It a Done Deal?
Market Expectations and Probabilities
According to the CME FedWatch Tool, as of September 15, 2025, there is a 94-96% probability that the Fed will cut its key interest rate by 25 basis points (0.25%). This data shows that investors are almost certain about expecting a rate cut.
Rate Cut Probability Table:
| Date Source | Source | 25 bps Cut Probability | 50 bps Cut Probability | No Change Probability |
|---|---|---|---|---|
| Sep 15, 2025 | CME FedWatch Tool | 94-96% | 4-6% | <1% |
| Sep 15, 2025 | Reuters Poll | ~100% (105/107 economists) | Very Low | ~0% |
| Sep 12, 2025 | Al Jazeera | 94.5% | ~5% | <1% |
Fed Meeting Timeline 2025:
| Date | Event | Expected Action | Current Rate Range |
|---|---|---|---|
| Sep 17, 2025 | Next FOMC Meeting & Rate Decision | 25 bps cut (94-96% probability) | 4.25-4.50% |
| Oct 29, 2025 | Second FOMC Meeting | Possible additional cut | 4.00-4.25% (if cut) |
| Dec 10, 2025 | Final FOMC Meeting of 2025 | Possible third cut | 3.50-3.75% (if 3 cuts total) |
What Does the CME FedWatch Tool Say?
The CME FedWatch Tool is a very important indicator that predicts the Fed’s future policies. This tool uses pricing data from 30-day Fed Fund futures to track market participants’ expectations.
Current Probabilities (Sept 15, 2025):
- 25 bps cut probability: 94-96%
- 50 bps cut probability: 4-6%
- No change: Less than 1%
Expert Opinion – What Are Specialists Saying?
According to Raymond James Chief Economist Eugenio Aleman, unless Fed officials believe the economy is heading into recession, the possibility of a 50 basis points cut is very low. He says that aggressive rate cuts will only happen if economic conditions are very poor.
In a Reuters survey, 105 out of 107 economists said the Fed will definitely make a 25 bps cut. This consensus shows that experts are also confident about the rate cut.
Labor Market Situation is Concerning
The Fed’s decision is mainly coming due to the weakening labor market. Recent data shows that:
- Only 22,000 jobs were added in August
- Unemployment rate increased to 2020 levels
- Significant downward revisions in job growth
Fed Rate Cut Impact on Markets
When the Fed reduces interest rates, stock markets usually benefit. Lower borrowing costs mean companies get cheaper money for expansion and consumers have more disposable income.
Expected Benefits:
- Companies’ borrowing costs will decrease
- Consumer spending may increase
- Growth stocks may get special benefits
Gold and Commodities
Gold prices are already trading at record highs due to rate cut expectations. Lower interest rates are usually positive for gold because:
- Dollar becomes weaker
- Real yields decrease
- Demand for inflation hedge increases
Bond Market and Treasury Yields
Treasury yields are already near recent lows due to rate cut expectations. 30-year mortgage rates have also fallen significantly, which is good news for the housing market.
Currency and International Impact
Due to expected dollar weakness, emerging market currencies may benefit. This can also be a positive development for Indian markets because:
- FII inflows may increase
- Indian companies’ foreign borrowing costs may decrease
- Export competitiveness may improve
What’s Next? – Future Outlook
According to market expectations, there could be total 3 rate cuts in 2025. This could take the Federal Reserve from 4.25-4.50% to 3.50-3.75% range.
Upcoming FOMC Meetings 2025:
- October 29, 2025 – Second possible cut
- December 10, 2025 – Third possible cut