Name: Fed likely to keep cutting interest rates, multiple dangers lurk
Uploaded: 2025-10-28T16:12:38.825Z
Duration: 3 min 3 s
Description: A recent CNBC survey of economists and market participants shows that an overwhelming majority expect the Federal Reserve to implement further interest rate cuts in upcoming meetings.

A recent CNBC survey of economists and market participants shows that an overwhelming majority expect the Federal Reserve to implement further interest rate cuts in upcoming meetings.

Washington

A recent CNBC survey of economists and market participants shows that an overwhelming majority expect the Federal Reserve to implement further interest rate cuts in upcoming meetings. The survey suggests that up to 100 basis points of cuts are anticipated through 2025 and 2026, with the average federal funds rate projected to be 3.2% by the end of 2026. 

Respondents expressed concern that the ongoing government shutdown is limiting the Fed's access to key economic data, with only a small fraction feeling extremely confident in the current economic picture. Despite these challenges, most believe the shutdown will have minimal impact on the stock market and that any economic losses will be recovered once the government reopens. However, there is notable uncertainty about whether the Fed might cut rates too much or too little due to the lack of reliable data.

Fed likely to keep cutting interest rates, multiple dangers lurk

The latest CNBC Fed survey is out. Steve Leisman joins us now. I can't believe it. The ADP and the Fed survey. All in one day. Man, he's still my beating heart. What's it say? It says, Joe, that a rate cut is on the way from the Fed this meeting, the next meeting in December as well, and possibly in January, despite the government shutdown, in which, according to one of our respondents to the survey, says the Fed is flying blind. 92% say the Fed will cut. That would be different how. But only... Are you gonna comment the whole way through? Because it's okay, if they give me the time and back, I don't mind the amount, it's a play-by-play. It was a hell of a run around the end. Anyway, 92% say the Fed will cut, 66% say the Fed should cut. 100 basis points total of cuts in 2025 and 2026, so we're not far from the end here. 320 is the average funds rate for our 38 respondents for the end of 2026. December 2025, just a couple months from now, the Fed will end QT. Richard Bernstein, CEO of Richard Bernstein Advisors, writes into the survey, politics rather than financial conditions are clearly influencing the Fed's rate decisions. Financial conditions are near historically easy, financial assets are ripping, and inflation remains well above the Fed's target. In more normal times, there is no way the Fed would be cutting rates here. I think ZeroRose is gonna have some comments on that. There I am commenting on my own commentary. In more normal times, the Fed would be seeing economic data, but it's not due to the shutdown. 45% of respondents think the shutdown ends in October, 34% say it takes until November. The respondents on average say it costs the economy about 0.3 percentage points per month when the government is closed. But most of them say the economy gets it back after it reopens, with 39% saying at least some of it, 55% saying all of it. 8 out of 10 say it will have no effect on the stock market. That looks pretty obvious. But there's some concern about the Fed making all these decisions without data. Only 5% are extremely confident they have an accurate picture of the economy with the data they're currently getting. 71% saying they're somewhat confident, 24% say not at all. Guy LaBasse of Jamie Montgomery Scott writes in, is it LaBasse, LaBasse? LaBasse. LaBasse? He's French. He's French. I love it. Anyway, he says the Fed is flying in a blizzard with a blindfold on, and no backup instrumentation isn't a great place for monetary policy. It's even worse than there were mountains in the area. In equal percentages, respondents worry that the lack of data could cause the Fed to cut too little or cut too much. I can do this one. It'd be fun to do this whenever you're on, just as you're going. I think that's fine. It's a constant. What do you think, sir? University History Science Theater 2000. It's a little guys down in the front. Or the Muppets. Somebody once decided to do a crawl on radio. That's a good idea. He said, why do they have a crawl on TV, but not one on radio? You can't really do that. You can't really do that. It was a senator from Minnesota who was a comedian at one time.

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