Fed Rate Cuts Sep 17: What Interest Rate Will Powell Set?

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The countdown to the Fed’s first rate cut of 2025 has begun, and Wall Street is treating it as a done deal. With the decision just 5 days away, the big question isn’t if the Fed will cut, but how much. 

A smaller 25bps move seems almost certain, but whispers of a deeper cut are stirring fresh debate. And how will this impact crypto market. 

September Cut Locked In

According to a Reuters survey of 107 economists, almost all expect the Fed to cut rates by 25 basis points on September 17, lowering the benchmark range to 4.00%–4.25%. The CME FedWatch Tool supports this outlook, showing a 92.5% probability of the same move.

Only two analysts think the Fed could act more aggressively with a 50 bps cut, but markets are already pricing in chances of deeper easing before the year ends. Most economists now see at least one more cut by December, with total reductions likely between 50–75 basis points.

Looking further ahead, additional cuts in 2026 could bring rates closer to 3.00%. For now, though, the September rate cut is seen as almost certain.

Jobs Take Priority Over Inflation

The shift in certainty comes after weak labor market data pushed many analysts to rethink their outlook. August showed slower job growth, and previous numbers were revised downward, signaling the U.S. economy is cooling faster than expected.

But this time, the Fed appears more worried about jobs than inflation. Chair Jerome Powell and other officials have hinted they are ready to support the labor market, even though inflation still sits slightly above the 2% target.

Michael Gapen, chief U.S. economist at Morgan Stanley, put it simply: “Ignore where inflation is today and ease policy to support the labor market.”

Market Reaction: Crypto and Stocks Soar

Financial markets are already reacting. U.S. stocks have edged higher this week, fueled by expectations of cheaper borrowing costs. Meanwhile cryptocurrency including Bitcoin, have also seen a neary 3% bounce, trading at $115,530 well above the strong resistance level . 

Traders say that lower rates reduce financing costs and weaken the U.S. dollar, making Bitcoin and other cryptocurrencies more attractive to global investors.

Crypto analysts add that if easing continues through year-end, the liquidity boost could fuel fresh inflows into Bitcoin ETFs, which have already seen strong demand.