Poll responses ranged from 2.25%-2.50% to 3.75%-4.00%, reflecting uncertainty around economic growth, inflation, and speculation over who will succeed Jerome Powell as Fed chair in May.
A majority (76%) of economists flagged the risk that rates could be cut too low, raising concerns about the Fed’s independence amid ongoing political pressure.
Lawrence Summers told attendees at the Mortgage Bankers Association event that the Fed is misjudging the economy’s neutral rate, suggesting interest rates may climb instead of decline. https://t.co/n42Ac49SLV
— Mortgage Professional America Magazine (@MPAMagazineUS) October 21, 2025
Delayed data, persistent inflation
A three-week government shutdown delayed key official data on employment and inflation, further complicating the Fed’s decision-making. Private-sector reports suggested modest layoffs and hiring, with the unemployment rate expected to hover around 4.3% through 2027.
ADP revealed that the private sector shed 32,000 jobs in September, while Challenger, Gray & Christmas reported 54,064 job cuts for the month. Hiring plans, meanwhile, have collapsed to the lowest level since 2009.
Meanwhile, inflation was projected to remain above the Fed’s 2% target, with upcoming data expected to show consumer inflation rising to 3.1% in September from 2.9% in August.