Fed seen cutting policy rate by a full percentage point this year

The U.S. Economy contracted by 0.3% in Q1 2025, signaling a slowdown. Policymakers project a full percentage point reduction in rates by year-end, beginning cuts in June.

Economists highlight risks of recession due to tariffs and decreased consumer spending. Futures indicate four quarter-point cuts expected, leading to rates between 3.25% and 3.5%.