The Fed will cut interest rates for the third and final time this year

The Federal Reserve is expected to cut its benchmark interest rate for the third time this year — but this could be the last rate cut we see for months.

The US economy remains robust, with the labor market holding steady and economic growth progressing. But inflation’s progress toward the Fed’s 2% target appears to have stalled in recent months.

Taken together, economic numbers show the Fed need not rush to lower borrowing costs after this week – as Fed Chairman Jerome Powell noted recently.

“We can afford to be a little more cautious,” Powell said in New York earlier this month. “I feel very good about where the economy is and where monetary policy is.”

The Fed began cutting interest rates in September, starting with a bold half-point cut. Powell said the move reflected the Fed’s commitment to maintaining the health of the labor market and appeased some investors who feared unemployment would rise.

That turned out not to be the case; both the economy and the labor market remain on solid footing, as Powell noted in his New York speech.

Still, Wall Street fully expects the Fed to follow through with another quarter-point rate cut this week.

“Fed officials are in a really awkward spot with this rate cut,” Karl Schamotta, chief market strategist at Corpay, told CNN.