US Fed interest rate cut prediction: Experts predict benchmark lending rate

US Federal Reserve opened its two-day policy meeting Tuesday, poised to keep interest rates unchanged as officials gauge the health of the jobs market and try to manage stubborn inflation. The rate-setting Federal Open Market Committee (FOMC) started its gathering at 10 am (ET) as scheduled, a central bank spokesperson said.

The meeting comes as the Fed faces sharp challenges from President Donald Trump's administration, sparking worries that its independence from politics could be threatened.

But economists expect policymakers to hold firm as they assess the effects of three recent consecutive rate cuts that brought the benchmark lending rate to a range between 3.50 percent and 3.75 percent.


"The outcome is all-but a foregone conclusion," said a JPMorgan research note.

"Fed officials across the spectrum have indicated that after three 25-basis-point 'risk management' rate cuts, now is a good time to pause and take stock of developments," JPMorgan analysts added.

But despite the central bank's signals, Trump has continued attacking Fed Chair Jerome Powell for keeping rates "high" and urged more cuts to boost the economy.

The Fed has a dual mandate of maintaining stable prices and keeping unemployment low, and it does so by adjusting interest rates.

Lower rates stimulate the economy and jobs market while higher levels help dampen inflation -- which remains above the Fed's two-percent target.

At his scheduled press briefing Wednesday, Powell will likely emphasize that the Fed's cuts should help to stabilize the labor market, leaving officials well positioned for now to assess their impact, said Goldman Sachs economist David Mericle.

"Further cuts will be less urgent if the labor market stabilizes, as we expect, and it will likely take a while for inflation to fall enough to create a strong consensus on the FOMC to cut again," he added in a note.