The US Federal Reserve may make two more interest rate cuts this year.

The US Federal Reserve (Fed) will cut interest rates two more times, next week and in December, according to the majority of economists. Experts participating in a Reuters survey stated that the interest rate path until 2026 is uncertain.

While only one cut was expected last month, recent statements from Fed officials have increased the likelihood of further easing. The bank appears to have opted to support growth while trying to strike a balance between high inflation and a weakening labor market.

Of the 117 economists surveyed, 115 predict the Fed will cut its policy rate by 25 basis points on October 29, bringing it to the 3.75% – 4.00% range. Support for a next cut in December is at 71%.

Markets have already priced in these predictions; Interest rate futures indicate that two more rate cuts are almost certain.

Fed Chairman Jerome Powell and many other members emphasize that they will keep their focus on the employment market. However, the three-week-long government shutdown is clouding the picture by delaying the release of both inflation and employment data.

HSBC economist Ryan Wang noted the difficulty in the Fed’s decision-making process, saying, “Half of the FOMC members are focused on the labor market, and the other half on inflation risk.”

Private sector data shows that layoffs and hires are balanced, indicating no major change in employment.

The Fed’s target inflation rate of 2% will remain above this level until 2027.

Some economists say the 2026 roadmap is unclear due to the uncertainty surrounding the post-Powell Fed chairmanship.

Deutsche Bank economist Brett Ryan stated, “The risk is that the Fed will make more interest rate cuts next year. Also, the risk of the institution losing its independence is higher under this leadership.”