Fed Opens Crucial Two-Day Meeting as Markets Brace for First Rate Cut

Lead The Federal Reserve convened its September policy meeting today in Washington, with newly confirmed governor Stephen Miran sworn in and markets pricing in a 25-basis-point rate cut at tomorrow’s conclusion.

Nut Graf Against a backdrop of growing labor-market weakness and persistent inflationary pressures, the Fed’s gathering is under intense scrutiny. Investors and policymakers alike are watching for signals on the pace of future easing, while legal battles and political pressures add an unprecedented layer of complexity to the central bank’s decision making.

Market Caution Ahead of Rate Decision

• Equity markets traded choppily, with the S&P 500 and Nasdaq paring early losses as traders adopted a wait-and-see stance ahead of Wednesday’s announcement.
• Retail sales data showing resilient consumer spending did little to alter expectations of a 25 bp cut, with futures markets still assigning over a 90% probability to that outcome.

Governance Shake-Up and Legal Battle

• On Monday, Stephen Miran was sworn in to fill the Fed Board vacancy, granting him voting rights for the first time in this meeting.
• Fed governor Lisa Cook, who survived a White House removal attempt in federal court, also cast her vote despite ongoing litigation, underscoring the court’s defense of Fed independence.

Global Currency Impact

• The US dollar slid to a four-year low versus the euro as traders ramped up bets on imminent rate cuts, with the euro rising 0.9% to $1.1867.
• The dollar index fell 0.7% to 96.636, its weakest level since July 2025.

Looking Ahead: Tomorrow’s Announcement Federal Open Market Committee members will unveil their decision at 2 p.m. Eastern tomorrow, followed by Chair Jerome Powell’s press conference at 2:30 p.m. Markets will closely dissect the dot plot and Fed projections to gauge the likely trajectory of rates through year-end and into 2026.