The Federal Reserve will announce its interest rate decision decision at 2:00 PM (ET) on Thursday with the market expecting a 25 basis point rate cut
The Federal Reserve Board is set to announce its latest interest rate decision amwith markets widely expecting a 25-basis-point cut, bringing the target range down to 3.50%–3.75%. However, unlike previous meetings, a rare division has emerged inside the FOMC, with some voting members reportedly leaning toward opposing further easing—an unusual sign of disagreement at a pivotal moment in the economic cycle.
Analysts note that the policy meeting is complicated by the ongoing U.S. government shutdown, which has resulted in missing October economic data. Because of this data gap, the Fed is expected to make only limited adjustments to its Summary of Economic Projections (SEP) and the dot plot, leaving the market with fewer clues about the medium-term policy trajectory.
Beyond the rate cut itself, liquidity management has become the central focus for investors. Markets are watching closely to see whether the Fed will introduce a new Reserve Management Bond-Buying Program (RMP) once the current balance-sheet runoff concludes. According to projections from Bank of America, the program could involve the purchase of roughly $45 billion in short-term U.S. Treasury securities each month starting in January. When combined with reinvestments from agency MBS, the total monthly balance-sheet expansion could reach nearly $60 billion.
If the RMP is officially announced, analysts expect the meeting’s narrative to shift away from the rate path and toward the outlook for liquidity, reserve levels, and the Fed’s broader balance-sheet strategy. Such a move would signal a major operational transition for the central bank and could significantly affect funding markets, Treasury yields, and risk-asset sentiment.
