An uncertain environment has Wall Street questioning when rate cuts will come in 2025

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In today’s big story, the Fed is likely to cut rates again today, but don’t bank on more coming after that.

What’s on deck

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But first, it might be the last one for a while.

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The big story

Here today, gone tomorrow

Getty Images; Jenny Chang-Rodriguez/BI

Enjoy today’s rate cut because it might be the last one for a while.

The Fed is expected to make its third-straight rate cut this afternoon, but the certainties end there, write Business Insider’s Ayelet Sheffey and Madison Hoff.

Plenty of people on Wall Street believe today marks the end of the Fed’s three-month rate-cutting spree, writes BI’s Matthew Fox. Yardeni Research and Goldman Sachs both warned the Fed might take a breather when it meets again at the end of January.

Apollo’s top economist, Torsten Sløk took things a step further, suggesting a potential rate hike in 2025.

So what’s giving the Fed … pause? (Sorry. I had to do it.)

First, inflation is still very much a thing. While prices have improved since 2022, we’re not at the 2% target Fed chair Jerome Powell set as a long-term goal. It’s also ticked up a bit, with the consumer price index hitting a 2.7% year-over-year growth rate in November.

Meanwhile, the recent jobs report also shows the labor market is in a decent spot.

Those figures aren’t exactly where the Fed would like them to be, but they’re also not so bad that the central bank would adjust rates after today’s announcement to enact change.

Jeff Bottari/Zuffa LLC via Getty Images

One other factor has market watchers unsure about the Fed’s next move: the incoming president.

President-elect Donald Trump has made clear he intends to make big changes once he’s in office. Talk of widespread tariffs, in particular, has some investors on edge.

Many economists believe Trump’s trade plans will lead to higher inflation, as companies raise prices to pass on the taxes they face to customers.

(It’s not a bulletproof prediction. Trump implemented tariffs during his first term and inflation decreased, and some believe that could happen again.)

There’s another twist: Trump might not do anything with tariffs. The president-elect’s tough talk could be a negotiation tactic to get better terms from China, Canada, and Mexico on various topics.

All that uncertainty puts the Fed in a tricky spot. Powell recently said the Fed couldn’t make policy changes based on something that “lies well into the future.” Instead, it needs to focus on the here and now.

So that means a rate cut today, and who knows tomorrow.

News brief

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The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Amanda Yen, associate editor, in New York. Milan Sehmbi, fellow, in London.