SA Sentiment: Will the Fed only cut interest rates once in 2025?

[Fed Chair Jerome Powell Holds Press Conference On Interest Rates]
Chip Somodevilla/Getty Images News

As the Federal Reserve left its benchmark interest rate unchanged once again at 4.25%-4.50%, market participants are anticipating no more than two cuts this year.

Fed policymakers gave no indication of the direction of its next rate move. To note, two board governors voted to cut rates by 25 basis points, the first double dissent [https://seekingalpha.com/news/4474633-federal-reserve-holds-rates-again-but-two-voters-dissent] since 1993.

Markets had been pricing in another pause at the Fed's meeting in September, according to the CME FedWatch Tool, but those expectations have changed since the release of July's non-farm payrolls data on Friday.

Jobs growth in July was well below consensus estimates, and data from the last two months saw massive revisions, indicating that job creation was much weaker than expected [https://seekingalpha.com/news/4476512-nonfarm-payrolls-lower-than-expected-in-july-unemployment-rate-ticks-up-to-42].

At the time of publishing, the odds of the Fed bringing its policy rate to 3.75%-4.00% by the end of the year increased significantly.

Turning to Seeking Alpha readers, expectations once again mounted for one cut this year. According to July's Sentiment Survey [https://docs.google.com/forms/d/e/1FAIpQLSdzB4QAcG1HZAi1JUnJy-_EiBdKFXrFjPyxznzGUOpa_QkPSw/viewanalytics], which gathered around 1,000 responses, the percentage of respondents expecting one cut increased by 8 percentage points M/M and up 33 pp since January.

The percentage of respondents expecting two cuts decreased by 21 pp since the start of the year. To note, the survey was taken before the Fed's policy decision and the jobs report this week.

Here's a look at SA readers' rate cut expectations so far this year:
[Seeking Alpha survey results]
Seeking Alpha survey by Wall Street Breakfast

MORE ON INTEREST RATES

* The Fed Won't Cut Rates In September [https://seekingalpha.com/article/4806721-the-fed-wont-cut-rates-in-september]
* Odds Of No Interest Rate Cuts In 2025 Rise [https://seekingalpha.com/article/4807368-odds-of-no-interest-rate-cuts-in-2025-rise]
* Investors Tune Out Political Noise As Fed Holds [https://seekingalpha.com/article/4806831-investors-tune-out-the-political-noise-as-the-fed-holds]
* Trump fumes at Powell for not cutting rates, again [https://seekingalpha.com/news/4475418-trump-fumes-at-powell-for-not-cutting-rates-again]
* Another blow to September rate cut hopes after PCE data [https://seekingalpha.com/news/4475582-another-blow-to-september-fed-rate-cut-hopes-after-stubborn-pce-inflation-data]