When Is the Next Fed Meeting?

"When is the next Fed meeting?" is a question that hasn't weighed this heavily on anxious investors' minds in probably four decades.

Which is fair enough, really. The worst bout of inflation to hit the U.S. economy in 40 years peaked two-and-a-half years ago, and yet the Federal Reserve has only just begun its easing campaign.

The Federal Reserve at long last brought borrowing costs down from a 23-year high in September, slashing interest rates by a surprising half-percentage point. The Federal Open Market Committee (FOMC) then followed up its last policy meeting by cutting the short-term federal funds rate by 25 basis points (bps), or 0.25%, to a target range of 4.50% to 4.75%.

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That said, the change in the political landscape complicates the central bank's calculus, as inflationary pressures could resurface under new administration policies.

That's a problem, because the Fed has a dual mandate. In addition to stable prices, the central bank is supposed to support maximum employment.

"At this early stage, the likelihood, scale and timing of Trump's proposed tariffs on imports and tax cuts are too uncertain for the Fed to pass judgment, even though they pose material upside risks to the inflation outlook," writes Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "With the Fed's independence at risk of being undermined during Trump's term, Mr. Powell and other Fed officials surely will keep as quiet as possible for as long as they can."

The question now is whether the Fed will maintain its current pace of quarter-point cuts. Although economists as a group have become more optimistic about the path of the economy, surveys show they still put the odds of a recession hitting in 2025 at around 33%. They have good reasons to remain cautious. You can still find inverted yield curves in parts of the bond market, for one thing, which is not very reassuring. For what it's worth, the New York Fed's yield-curve model gives a 35% probability to the U.S. entering a recession over the next 12 months.

The bottom line? When you consider the Fed's dual mandate against the backdrop of a mid-cycle economic expansion (easing inflation, slackening in the labor market), it kind of makes sense that folks are obsessed with the question of "when is the next Fed meeting?"

The fact that lower interest rates today equal higher returns for equities tomorrow also makes rate cuts rather attractive to market participants.

The next Fed meeting: what to expect

For the record, the central bank's rate-setting committee is called the Federal Open Market Committee (FOMC).

As you can see from the FOMC meeting calendar below, the committee meets eight times a year. These meetings last two days and conclude with the FOMC releasing its policy decision at 2 pm Eastern time. The Fed chief then holds a press conference at 2:30 pm. (Pro tip: as closely scrutinized as the Fed statement might be, market participants are usually even more keen on what the Fed chair has to say in the press conference.)

As for the next Fed meeting, it will begin on December 17 and conclude with a policy statement on December 18 at 2 pm Eastern. A quarter-point cut is by far and away the betting favorite.

As of December 9, interest rate traders assigned an 86% probability to the FOMC slicing the short-term federal funds rate by 25 bps to a target range of 4.25% to 4.50%, according to CME Group's FedWatch Tool. The remainder, or 14%, expect the FOMC to leave rates unchanged.

For those wondering "when is the next Fed meeting?," have a look at the schedule, courtesy of the FOMC, below.

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