The Federal Reserve Meeting Starts Today—What You Need to Know

• The Federal Reserve’s two-day policy-setting meeting begins Tuesday.

• Investors widely expect the central bank to cut its influential interest rate.

• However, members of the policy committee may divided on the decision and the course of monetary policy to come.

The Federal Reserve enters a pivotal meeting on Tuesday, where it’s widely expected to cut interest rates for the first time since December.

What the Fed signals about whether more cuts are coming will drive markets on Wednesday afternoon, when the Federal Open Market Committee will wrap up its two-day meeting. The FOMC appears divided on the path ahead, all while President Donald Trump continues exerting pressure for it to cut rates.

Lower rates would make it cheaper for households and businesses to borrow, helping to sustain spending and supporting a seemingly faltering labor market. The risk is that overdoing rate cuts could rekindle inflation, just as tariffs put upward pressure on prices.

Fed Chair Jerome Powell is due to take questions from reporters at 2:30 p.m. ET. Powell could face a “challenging press conference” as he tries to summarize the FOMC’s debate, Deutsche Bank Chief U.S. Economist Matthew Luzzetti wrote in a research note.

Given the sluggish job report from August, markets anticipate a rate cut, but one lingering question is how big.

The Fed is likely to stick with its usual playbook of making small moves of 0.25% at a time, which would lower its benchmark rate to a range of 4% to 4.25%. There’s a slight chance that the Fed could surprise markets and opt for a more aggressive 50-point cut, lowering rates to between 3.75% to 4%.

August’s weak jobs gains sparked market talk of a larger cut, though the odds have dropped as the FOMC meeting approaches and now appear to be close to zero.

A smaller cut “seems all but a given,” Richard Moody, chief economist at Regions Financial, wrote in a research note. But there is “plenty of intrigue around the rest of the meeting,” Moody wrote.

Part of the intrigue is the roster of FOMC voters on Wednesday.

The Senate voted on Monday to confirm Trump’s newest appointee to the Fed: Stephen Miran, a top White House economist. He will have “just enough time to get his Fed ID badge, figure out where the restrooms are, and cast his vote,” Ian Katz, a policy analyst at Capital Alpha Partners, wrote in a note to clients before the confirmation.

It will be the “strangest FOMC meeting ever,” Katz added, considering Trump’s ongoing legal fight to oust Fed Governor Lisa Cook.