Fed decision due September 17, where it is expected to cut rates for the first time in nine months, likely by 25 basis points.
August payrolls grew by just 22,000; June revised to a job loss, unemployment at 4.3%.
Trump has called for a sharper reduction and floated potential successors to Jerome Powell.
Trump Anticipates ‘Big Cut’ as Federal Reserve Slated to Meet This Week
The Federal Reserve is expected to cut interest rates this week for the first time in nine months, as weak jobs data strengthens the case for easing policy
Federal Reserve
Summary
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The Federal Reserve is expected to lower interest rates this week for the first time since December, with policymakers gathering against a backdrop of weaker jobs data and persistent political pressure from the White House.
President Donald Trump, speaking on Sunday as he returned to Washington, said conditions were 'perfect for cutting', predicting what he called a 'big cut' in borrowing costs. His comments mark the latest in a series of public calls on the central bank to loosen policy more aggressively.
Market participants across the globe anticipate a 25 basis-point reduction when the Fed meets on September 17, though officials remain wary of moving too far, too fast. Inflation is still running above the Fed’s 2% target, and tariff-related price pressures could intensify if tariff uncertainty continue.
The labour market is now showing clearer signs of strain. Revisions to earlier data also underscored the slowdown. June, initially reported as a gain of 139,000 jobs, was later revised to a loss of 13,000,the first monthly decline in more than three years. July’s estimate was adjusted slightly higher, though the overall trend points to slower recruitment, shorter working weeks and a moderation in pay growth.
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The unemployment rate rose to 4.3%, its highest level since 2021, though the increase was largely due to more Americans seeking work. Meanwhile, average working hours have shortened to 34.2 a week, and wage growth has eased to 3.7%. Together, the figures point to a softer jobs market that could weigh on household spending.
Trump has repeatedly clashed with Fed Chair Jerome Powell, whose term runs until 2026, and has floated alternative candidates including Fed Governor Christopher Waller, former governor Kevin Warsh and ex-White House adviser Kevin Hassett.
While officials remain cautious about moving too quickly given inflation risks, this week’s meeting could see Powell and his colleagues inch closer to the outcome the US President has long demanded.
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