Will the Federal Reserve lower the target range for the federal funds rate at its next FOMC meeting?

Based on available information, the Federal Reserve has cut interest rates three times in 2025. Although current economic data shows slowing growth, there are no signs of a severe recession, so the likelihood of a rate cut at the next meeting is low.

According to the Federal Reserve's public 2026 FOMC meeting schedule, the next meeting is September 15-16, and the Federal Reserve just released the latest FOMC statement on July 29. As of August 12, 2026, there are no clear policy signals from public channels indicating an immediate rate cut at the September meeting. Combined with the Federal Reserve's historical caution in adjusting policy at quarterly meetings that include the Summary of Economic Projections, it is judged that the probability of not cutting rates at the September meeting is higher.

Based on the latest economic data and the minutes of the Federal Open Market Committee (FOMC) meetings, the probability of the Fed cutting rates at the next FOMC meeting is currently low. The main reasons are as follows: 1. **Inflationary pressure persists**: Although recent U.S. labor market data has been weak and the unemployment rate has risen, inflationary pressure has not significantly eased. Core PCE inflation is expected to remain around 3.3% in the second half of 2026, well above the Fed's 2% target. In addition, the rise in crude oil prices due to the U.S.-Iran conflict has further increased the risk of upward inflation. This makes the Fed cautious on rate cuts, repeatedly emphasizing the need for more evidence that inflation is sustainably falling toward the target level. 2. **Internal FOMC disagreements**: At the July 29 FOMC meeting, three regional Fed presidents voted in favor of a rate hike, showing internal divisions on whether further monetary tightening is needed. Although the final decision was to keep rates unchanged, this division indicates high uncertainty about the economic outlook, especially under the dual risks of a cooling labor market and rebounding inflation. 3. **Market expectations and expert analysis**: According to CME Group's FedWatch tool, the market still has about a 43% probability of a rate hike in September. Analysts at several financial institutions (such as Morgan Stanley and Wells Fargo) expect the Fed will not cut rates in 2026 and may even hike once before year-end. In addition, the new Fed Chair Kevin Warsh has emphasized the importance of restoring price stability after taking office and has established multiple policy review working groups, indicating that the Fed is more inclined to keep rates stable or further tighten policy in the short term. 4. **Economic growth slowing but still resilient**: Although Q2 GDP growth slowed to 1.5%, consumer spending and business investment still show resilience. This means the economy has not experienced a sharp decline, and the urgency for rate cuts is not high. In summary, based on current economic data, internal FOMC divisions, and market expectations, the probability of the Fed cutting rates at the next FOMC meeting is low.

According to the July 29, 2026 FOMC statement, the Fed kept the federal funds rate target range unchanged at 3.50%-3.75%, and three officials leaned toward a hike, indicating a hawkish stance. As of August 12, 2026, FedWatch probabilities based on CME federal funds futures data show that the implied outcomes for the September 15-16 next meeting are distributed only between holding steady (54.0%) and hiking 25 basis points to 3.75%-4.00% (46.0%), with no pricing at all for a cut to a lower target range. Therefore, the probability of the Fed lowering the target range at the next meeting is extremely low.

The probability of a rate cut at the Federal Reserve's next FOMC meeting (September 15-16) is extremely low, because inflation remains significantly above the 2% target, Chair Warsh emphasizes zero tolerance for inflation, the July meeting showed clear hawkish dissent, market expectations almost rule out a cut, and employment data, while weak, has not reached crisis levels.

The next FOMC meeting is September 15-16, 2026. The current policy debate direction is 'hold vs. hike', not a cut: the July 29 meeting kept the 3.50%-3.75% range unchanged by a 9-3 vote (the fifth consecutive hold), and the three dissenters—Hammack, Kashkari, and Logan—all advocated a 25 basis point hike, the first time since September 2016 that three members dissented in the same direction. With inflation still above target (July CPI 3.4% y/y, core 2.5%) and hawkish pressure within the committee, a rate cut announcement at the September meeting is a tail scenario. Market pricing also confirms this judgment: Polymarket on August 12, 2026 showed hold at about 67%, hike 25bp at about 34%, and cut 25bp at only about 1.3%. Therefore, this question should be judged as NO.

According to the latest information as of August 12, 2026, the next FOMC meeting is September 15-16, 2026. The current federal funds rate target range is 3.50%-3.75%, and the July meeting voted 9-3 to keep it unchanged (3 members advocated a hike). Inflation remains above the 2% target due to energy and supply chain shocks from the Middle East conflict, while economic growth is solid and employment is stable. Market pricing (Kalshi about 2% probability of a cut, CME FedWatch and related tools show mainly steady or hike, with cuts near 0), analyst consensus (e.g., Goldman Sachs expects cuts only in 2027, JPMorgan and others lean toward hikes or steady) all strongly point to no cut. Therefore, the probability of the Fed lowering the target range at the next meeting is extremely low.

My prediction is NO, meaning the Federal Reserve will not cut rates at the next FOMC meeting. It has been verified that the next meeting is scheduled for September 15-16, 2026. The July meeting kept the target range at 3.50%-3.75% by a 9-3 vote, with all three dissenters advocating a hike; the June dot plot also showed that only 1 of 18 participants expected the federal funds rate at end-2026 to be below the midpoint of the current range. Although the latest employment and CPI data have cooled, core PCE remains significantly above the 2% target, and private domestic demand remains strong. Combining the committee's stance and market pricing, I infer that holding rates in September is most likely, followed by a hike, and a cut is only a very small-probability tail risk.

As of August 2026, the Federal Reserve's federal funds rate target range remains at 3.50% to 3.75%. At the most recent FOMC meeting on July 29, 2026, the Fed kept rates unchanged, with 3 members voting in favor of a 25 basis point rate hike. Market expectations and futures tools such as CME FedWatch show that the next FOMC meeting on September 15-16, 2026, is only pricing in either holding rates steady or hiking, with the probability of a rate cut (lowering rates) close to zero.

My judgment is NO: the next meeting is September 15-16, 2026, and existing evidence clearly supports holding rates or hiking, not cutting. The July FOMC voted 9-3 to keep the target range at 3.50%-3.75%, with three members advocating a 25 basis point hike; the Fed's July Monetary Policy Report also said federal funds futures point to a rate of about 4% by end-2026. The latest data shows weakening employment, but July CPI is still 3.4% year-over-year, and core CPI rose 0.2% month-over-month, so inflation is not low enough to support a near-term cut. Therefore, I lower the probability of a cut to 2% and set the probability of no cut at 98%. [web:31][web:37][web:1][web:12]