6 Cuts By 2026? Drama After Today’s Expected 25bps Fed Rate Cut

Fed Rate Cut 25bps Expected Today, But Are 6 More Coming By 2026?

The financial world is buzzing with anticipation. In just a few hours, the Fed Rate Cut decision will be revealed, and traders, investors, and crypto enthusiasts are holding their breath. 

What makes this meeting so unusual? According to SoSoValue, it’s being called “one of the strangest meetings in years.” While a 25 bps cut is widely expected, the real intrigue lies in the signals from the dot plot federal reserve update and Chairman Jerome Powell 17 September press conference.

The “Safe Bet” vs. The 6 Rate Cut By 2026 Political Wildcard

Wall Street consensus, reflected in Wu Blockchain latest post, predicts a modest 25bps rate cut, bringing the federal funds target to 4.00 - 4.25%, but the market is seeing 6 rate cuts by 2026. This move, the first in a potential easing cycle, aims to support a cooling economy without spooking inflation expectations.

But politics may shake the script. White House Advisor Navarro, as shared by AshCrypto, wants the the authority to monetary ease much faster — a 50 bps monetary easing today and another 50 bps at the next meeting. This puts the authority in a tough spot, as it must balance market expectations with political pressure.

Why Is the Federal Reserve Interest Rate Announcement Forced Today?

The urgency behind the Fed Rate Cut becomes clearer when examining recent economic indicators as per SosoValue financial dashboard. 

Initial Jobless Claims surged to 263,000, exceeding forecasts of 235,000, signaling a weakening labor market. This isn't just a number; it's a clear signal that the labor market is weakening more than experts predicted.

The Wall Street Journal notes that Powell may now prioritize jobs over inflation, a subtle yet crucial shift that could justify today’s Fed meeting.

Dot Plot Drama: What Markets Are Watching

Here’s the Dot Plot federal reserve update: The 25bps rate cut news is largely priced in today, because investors are highly focused on the Summary of Economic Projections SEP, which projects future monetary easing movements. 

The central question: will the Federal reserve signal two or three cuts in 2025?

• If they signals three cuts, it would mean they are taking a dovish approach—supporting the economy more strongly. That could boost risk assets and even push crypto markets higher.

• If they only show two cuts, it would be a cautious move, meaning the Fed is still worried about inflation. This could slow down the current market rally.

The real fight is here: while the Fed talks about two or three cuts in 2025, QCP reports that markets are already expecting a much bigger move—6 cuts by 2026.

Market Positioning Ahead of the Fed Rate Cut Decision Today

The pre-decision market reaction reflects this tension:

• The US Dollar Index (DXY) has gone a little lower to 96.350, which means the dollar is getting weaker because people think the Fed will cut rates soon.

• In the bond markets, a lot of investors are buying the 20-Year Treasury bonds. Because of this strong demand, the yields (returns) are going down.

• Crypto markets are up +0.51% to $4.03 trillion, as investors gravitate toward higher-risk, higher-reward assets.

Why This 25bps Expected Monetary Easing Matters?

Tonight’s Fed Rate Cut decision is more than a single numerical adjustment—it’s a message about the political strategy for balancing inflation and jobs. 

With weaker labor data, political calls from White House Advisor Navarro, and markets expecting multiple future cuts, Powell’s 17 September press conference could set the tone for the remainder of 2025.

Whether they signal dovish support or cautious restraint, the impact will ripple across equities, crypto, and the US dollar. Traders and investors will be watching closely, especially the impact on market sentiment, to gauge whether today’s decision signals the start of a new easing cycle.