The Federal Reserve's policymakers are widely expected to cut its benchmark rate by 25 basis points to 4.00%-4.25% on Wednesday, its first cut since last December, in response to a softening labor market.

With the U.S. economy facing headwinds, the Federal Reserve faces pressure to trim interest rates this week for the first time since December 2024.

"This ongoing gap between market and Fed expectations means that some risk of upward pressure on mortgage rates remains, but for now, consumers have already benefited from the drop in mortgage rates that has brought mortgage rates below 6.5% for the first time in nearly a year and is likely to continue at least through this week."

Officials are projected to lower borrowing costs on Wednesday for the first time in 2025, with a quarter-point reduction seen as the most likely decision. Trading flows this week linked to the Secured Overnight Financing Rate,

Officials penciled in two more reductions this year following months of intense pressure from the White House to slash borrowing costs.

The Federal Reserve cut interest rates by 0.25 percent. The Fed says economic uncertainty remains elevated and higher tariffs have started to push up prices on some goods. Bloomberg News Anchor & Correspondent David Gura,

The central bank’s cautious approach to defending itself against President Trump is drawing scrutiny as the institution’s independence comes under threat.

Chicago financial executives said the Fed's independence is paramount as the central bank considers this week whether to cut interest rates for the first time in 2025.